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Apple Loses in Short-Term, Wins in the Long Run with Smart Litigation Risk Management Strategy

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Yesterday, Apple Co. announced a settlement with the Federal Trade Commission (FTC) where it would refund at least $32.5 million largely to parents who were victims of excessive in-app purchase by their kids.  In some cases, kids racked up thousands of dollars of purchases in iPad and iPhone games. The Washington Post has the story:

http://tinyurl.com/mbj4vrq

Now, Apple had a good argument that parents should be responsible for the actions of their children.  But, Apple made the smart litigation risk management decision.  Instead of advancing a legally correct but unpopular position, they agreed to pay a nominal amount to victims and are using this settlement for positive p.r. (Apple is now gushing about its protection of children).

When a company can remove emotion from the equation, they can make a sound business decision. Sometimes, the right answer is “fight to the death.”  Other times, the right answer is settlement and a positive public relations campaign.  As one of the most successful companies in the world, Apple made the smart litigation risk management decision.

Often, the letter is mightier than the lawsuit
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“Glenn helped me settle a business arrangement where money had been owed to me.  He used his creativity and tenacity to locate the individual, reference prior case law, and ultimately settle the situation without a lawsuit.  With just a few strategic correspondence, he helped end the lingering situation successfully.”  – Steve Y., Dallas, TX

 

Above is a nice recommendation from a former client of mine, Steve Y.  Steve was ready to give up on a bad debt, but let me take a shot at trying to obtain payment.  Of course, as a trial lawyer I am pre-programed to was sue first, ask questions later, but a lawsuit wasn’t something Steve wanted unless it was absolutely necessary.  So, we conducted an exhaustive public records search and discovered some pressure points we could use to help persuade the debtor to pay up.  We also found some Texas cases that showed our legal position was correct.  We drafted and sent three letters using the information and case law to our advantage.  In less than a week, Steve was paid in full.

This is an example of litigation risk management at work.  We solved a problem by our pre-litigation strategy, saving our client thousands of dollars in legal fees.