YOUR COMPANY NEEDS TO TESTIFY AT DEPOSITION/TRIAL:
NOW WHAT?
One of the certainties of business is that at some point, someone, is going to bring a legal action against your company. The federal courts and virtually all state courts allow for the deposition of corporate representatives. Federal Rule of Civil Procedure that governs this process is 30(b) 6. As such, corporate reps are often referred to as 30 (b) 6 witnesses. You may have already served in this capacity, but the lessons addressed below have been a pitfall for one or more of RRS’ clients’ testimony, and are not merely theoretical examples of problems that can arise.
Who Should Be The Corporate Representative?
In most cases, the company can choose its corporate representative. Although the plaintiff may require that a particular individual testify, they usually instead serve a corporate subpoena, which permits the company to select the person who will testify.
The deposition request generally includes a list of subject matters to be covered. This allows the company to identify the proper persons to testify. The representative should either have first-hand knowledge for each topic, or must learn about them.
The company is permitted to use separate representatives for each topic. If there is a topic regarding sales, the person to testify on this issue may be the sales manager. If another topic is, for example, quality control, the company might designate the production manager or an engineer.
At trial, you may decide to use one well-spoken individual to testify on all matters. But for a deposition, which will become a cold, black-and-white transcript, you may want to have several people testify in their areas of specialty. Before trial, the company designated corporate representative will have an opportunity to review the others depositions to familiarize him or her with all prior testimony in the case.
Corporate Memory/Institutional Information
Whoever has been designated to testify must possess the institutional memory for the company. They are not merely testifying based on personal knowledge and information, but are instead testifying on behalf of the company.
The old rule was if a company no longer had documents or employees with the requested information, it could simply send someone to say that the company no longer has that information. In effect, the person most knowledgeable had no knowledge. This was a really neat trick when it came to prior claims or other topics they wanted to avoid.
Some really ingenious folks at very large companies started a new strategy – when a lawsuit was filed, move people with damaging information to a sister company, or retire the person. Then the company could honestly say that the person with the most knowledge no longer works for the company, and the company no longer has such information.
Predictably, courts took a dim view of such actions, and a new rule was put forth: the corporate representative must learn the corporate history, even if it means seeking out former employees and long-lost documents. They must become knowledgeable if they weren’t already.
The problem is much greater for older and smaller companies. The company founder, long since retired (or possibly dead) had the information requested. He or she is no longer available, but somehow, the corporation must provide the information or be subject to adverse inferences at trial, and possibly subject to other sanctions.
Thus, it is absolutely essential that you learn as much as possible about the topics being covered. Doing so, in consultation with your attorney and litigation managers at Risk Retention Services, can help the corporate representative testify effectively.
Corporate Documents and Records Retention
Usually subpoenas require that you bring documents to the deposition. These might be design documents, prior accidents, corporate documents, etc.
Past newsletters have addressed the need for a good records retention policy. A well-written policy will help insulate you from charges that you are hiding the ball by destroying documents, by showing that you were simply following established policy.
No company is expected to keep each and every document forever. However, without a records retention policy, it will appear that you are just destroying documents when it suits you (such as when you find out that the document might hurt you).
The testimony of a corporate representative will be best served and most persuasive when backed by a strong records retention policy that is actually followed.
Corporate Documents and How They Help
Some people believe that all companies are large institutions, and large institutions keep documents. This is of course, often a myth. But the fact of the matter is, in virtually every case, records regarding accidents, design changes, repairs, etc almost always help (not hurt) the defense.
Even if there are a large number of claims, the corporate representative can often explain that (a) the company investigates and records all claims so that they can ensure a safer product/premises/operation and (b) those claims are different from this one.
A lack of records means that you need to rely on the current memory of an event, repair, or accident that may have occurred years ago. Since there was nothing particularly memorable at that time, you are stuck with the plaintiff’s version of the event, without documents (or testimony) to refute the incident. Often, even a minor document jogs the memory of about events long ago.
Corporations Are People Too
The purpose of the corporate representative at trial is to establish that we may be a corporation, but we are people too and that a verdict against the corporation is a verdict against me and my hardworking people. It also sends the message that you care about your products and customers and that safety is a top priority. In other words, ‘I am here because I care’.
The plaintiff, on the other hand, will try to use the corporate representative to show that the company does not care, and is only concerned about making a profit, safety be damned.
At a deposition, the best that you can do is tread water. Always answer questions truthfully. Produce the documents that you have. Have the information required to answer the substance. All you really want to do at the deposition is … not hurt the case.
At trial, however, you have the opportunity to show that you care. Part of your job is to help set the table for the other defense witnesses and experts to demonstrate why you were not liable.
In almost every case, the corporate representative becomes an afterthought. You establish that there are procedures in place to protect the customer, and that safety is the first priority. The focus then becomes – what happened in this case.
If you are poorly prepared for the deposition, it can be made to look like you have something to hide at trial. Every time you correct an error from your deposition the jury sees that you answered differently affecting credibility. Your job is to leave the stand with the jury believing that your company cares about safety and acts in a reasonable manner and can be trusted.
ACTIVITY REPORT
Over the past quarter RRS closed 28 claims including five lawsuits and 23 non-litigated claims.
All five lawsuits were dismissed, some shortly before scheduled trial, without payment to the claimant or his attorney. (Shortly before this newsletter went to press, a sixth lawsuit was resolved by the insurer. Although the plaintiff had no expert to testify that there was a defect that caused the accident, and although all work other than a 3 day trial had been completed, the insurer settled a matter the day before trial – for $300,000. This lawsuit will be included in next quarter’s activity report).
Of the 23 claims, 17 were closed with no payment to the claimant. Four claims were settled for a nominal sum. Two were settled due to liability issues that were quickly identified, thereby minimizing the settlement amount and expenses. The average settlement per settled claim was $11,933 (and the average of all claims closed was an indemnity amount of $3,114.
