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What to do if the pipeline explodes.

If pipelines were perfect and never experienced a catastrophic failure, operating companies could just build their networks, transport product and never fear appearing in court as a defendant for damages resulting from an explosion.

However, pipelines are made by people and they do fail sometimes. The result is the very human response of a rising up of battalions of attorneys and the filing of many lawsuits seeking staggering amounts of damages. This interrupts business as usual. But, even in this situation, all is not lost. There are some legal strategies available that can soften or eliminate the blow and even possibly improve a company's image in the marketplace.

Three Major Themes

First, when the explosion occurs, it is most important for a company to immediately get its hands around what happened. Get the facts. As a result of human nature, if people in the vicinity are the sources, then some "facts" will be skewed not because of dishonesty, but because one who is involved has difficulty admitting responsibility even if he should. Usually an outside expert team is a better alternative. "Outside" may not necessarily mean non-company. It can be either third party or company people from outside that geographical region and having no responsibility for that particular pipeline.

Whichever group the company selects, its mission remains the same: get the most objective report as quickly as possible. Speed is critical because the company must work assiduously to stay ahead of the publicity curve. However, it should never disseminate a story at the outset only to be forced to dilute, twist, or re-invent the story later. Companies should strive to compile the facts, get the story straight, and stick with it.

In addition to sticking with the story, some of the best advice about believability is to always tell the truth. In fact, as an experienced trial lawyer once said, "Telling the truth isn't about a morality lecture. It is that every time someone starts bending the truth, someone else will contradict you. Every trial I've ever won involved somebody on the other side lying." Finally, the company should keep things as simple as possible to improve both comprehension and persuasiveness.

The second key theme is the legal team. When lawsuits begin rapidly piling up, the bulk of a company's defense team probably will be lawyers, with a lead attorney and support personnel, not all of whom will be lawyers. A company should concentrate on working with the lead attorney who will: coordinate its entire case, stand up in the courtroom and say "1 represent XYZ company," and be supported daily by a team that may be selected by that attorney or by the company itself. Sometimes the company will prefer to choose a ready-made team, but often will want to assemble a virtual team with a lead lawyer from one place and staff lawyers from another.

It is particularly noteworthy to recognize that usually only the lead attorney who devises and delivers the overall strategy will "make or break" a case. The support team will not (realistically cannot) do that because its role, as important as it is, is to provide back-up.

The third and equally critical--theme is strategy. General strategy consists of three options for the pipeline company:

* Settle quickly,

* "Scorched Earth," and

* Find someone to share the blame.

Settling quickly is usually the option selected when a company hopes that by bringing legal claims to a speedy conclusion it can achieve comparatively cheap settlements and that, as a side benefit, the public will have a shorter memory of the incident than if it dragged on in the media.

Along with a statement, the company--reiterating the incident was not its fault--could privately offer a settlement that would be fair but without approaching what a lawsuit may have forced the company to pay.

"Scorched Earth," means what it says. The company admits no wrongdoing, not even an iota of responsibility, expresses no desire to reach a settlement, and vows to contest every lawsuit to its bitter end. This strategy is often the company's position of choice, but it risks alienating erstwhile friends in the community or in the courtroom. Unless it is proven in spades, it risks jury retribution. Therefore, scorched earth is the strategy with the biggest rewards and the biggest risks.

Finding someone to share the blame is also caustically described as "If you have to swim in the cesspool, take some friends with you."

The company that chooses this strategy usually should be contrite, especially when deaths or injuries have resulted. The essence of a company statement would be: "This is a tragic event that we have investigated as quickly as possible. While it is not our fault, that does not change the fact we that we feel very badly for each and every victim and their families."

Two other scenarios occur less frequently:

* Acts of God, and

* Random acts of violence.

If any explosion occurs due to an Act of God, i.e., from natural forces in the environment such as lightning, that is a workable defense. It must be well proven.

In contrast, random acts of violence are not as strong a defense as they were in the 1970s. The law has "evolved" such that now, if the acts were foreseeable in the view of the opposing counsel, judge and jury, then the defendant (in this case, a pipeline company) should have taken preventive action.

The bottom line is that even the most safety-conscious pipeline companies are vulnerable to explosions, so it is not "if" but "when." But, when explosions do occur, companies can employ strategies so that ruinous jury verdicts do not automatically come crashing down.

Author: Ron Welsh is a trial lawyer at the Houston firm of Cunningham, Welsh, Darlow, Zook & Chapoton LLP (rwelsh@cdzc.com).

(Author Note--Part I of this series focused on "Avoiding The Litigation Minefields Of Pipeline Catastrophes," by discussing how companies can employ four yardsticks in exercising due care before a pipeline incident. These yardsticks are adherence to federal and state regulations, advisory standards, and private knowledge and conduct. Part 2 focuses on three major themes: facts, legal team, and strategy that a company can employ after a catastrophic event.)
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Title Annotation:Part 2: Battalions Of Lawyers
Comment:What to do if the pipeline explodes.(Part 2: Battalions Of Lawyers)
Author:Welsh, Ron
Publication:Pipeline & Gas Journal
Geographic Code:1USA
Date:Dec 1, 2005
Words:1032
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