Managing dispute communications across the board and beyond

When a dispute arises, communication with stakeholders should be timely, clear and consistent. The objectives are to engage the right people, preserve privilege, satisfy legal obligations and minimise exposure to new risks. The appropriate communications strategy will depend on the nature of the dispute and on the financial and non-financial exposure involved.

In practice, General Counsel often need to manage several lines of communications at once, each requiring a different approach.

The first is communication with the board. Organisations have different internal protocols around when a matter is escalated to the board. Those protocols are generally shaped by the nature of the dispute, whether it concerns a regulatory matter or an alleged breach of the law, the materiality of the financial exposure, the stage of the dispute including whether litigation is actual or threatened, insurance or notification obligations, and the reputational impact.

Once a matter is escalated, concise briefing notes should be prepared that cover the nature of the dispute, the parties involved, the relevant context and timeline, the potential financial and non-financial exposure, the legal position, any recommended strategy, a tracked mitigation plan and importantly, the decisions required from the board. The briefing should be framed around actionable steps, to help the board work out a strategy having regard to reputational, business-relationship and financial outcomes.

The frequency of updates should be agreed on, since the value of board oversight depends on the board being kept informed as risks and exposures develop. Care should be taken to preserve Legal Professional Privilege. Conversely, non-privileged communications should be drafted on the assumption that they may later be discoverable. Conflict of Interest policies should be observed where a board member presents with actual or potential conflicts. External counsel should be engaged early to advise on implications to the organisation and the personal liability of directors. After the matter resolves, the board should receive informed lessons-learnt advice, which may include updates to relevant policies and internal governance procedures.

The second stream is regulatory notifications. Obligations to ASIC, the ACCC, the OAIC, AUSTRAC, the ATO and other bodies should be confirmed early, and the relevant timeframes should be managed actively. Advice should be obtained on whether notification is required, the applicability of privilege, and the appropriate posture for engagement with the regulator. Ideally, all outbound notifications should be coordinated through General Counsel or a core response team with appropriate authority. A record of what was notified should be kept contemporaneously.

The third stream is insurance notifications. Policy terms should be checked carefully for scope of cover, exclusions, liability caps and conditions. Notification formalities should be complied with strictly, including the content and timing of notifications, since informal notification or late notification may compromise coverage. Disclosure of material facts should be full and accurate, with no misleading or incomplete statements.

The fourth stream applies to ASX-listed companies. Continuous disclosure obligations require that materiality be assessed early; disclosure is to be made of information which would materially affect the price or value of securities. Any exceptions should also be checked. For example, where the material contains confidential information, the company may be able to withhold it from disclosure. Where an announcement cannot be made immediately, a trading halt should be considered. Announcements themselves should be kept factual and should avoid speculation or admissions.

The fifth stream is employee communication. Information about a dispute should be shared internally on a need-to-know basis. Employees should be instructed not to communicate sensitive matters externally unless approved by General Counsel or their delegate. Messaging should be calm and measured. A whistleblower policy should be in place and properly managed. Otherwise, internal communications may later reach unintended external parties.

The sixth stream is media. General Counsel should assist the public relations team in drafting public statements and should review those statements before release. Public statements should be kept factual and objective and should avoid commenting on merits, strategy or privileged material.

The point that ties all six streams together is consistency. Inconsistencies between what is said to the board, to regulators, to insurers, to the market, to employees and to the media can create separate risks. For that reason, communications should be treated as part of the legal strategy, not separate from it.

This article summarises one chapter of Ironbridge Legal's General Counsel Guide. The full guide covers privilege, regulatory investigations, dispute resolution pathways, settlement offers and costs strategy, stakeholder communications, litigation funding and insurance, and the policies that build dispute readiness. Download your copy.