The media this week has been full of a great example of the power of social media to inflict a major reputation hit. This week’s target was Progressive car insurance, of tv ad fame. The social media attacker was a grieving brother of a woman who died, and the attack was both personal and successful. The attack began with a Tumblr post titled: My Sister Paid Progressive Insurance to Defend Her Killer In Court.
Progressive earned its pain by failing to act in good faith while handling claims related to car wreck that resulted in deaths. Having acted less than in good faith, it then made matters worse. How? By issuing a literally true but practically false public statement in which it tried to cause the public to think that being an intervenor supporting a defendant was substantively different than representing a defendant. All lawyers know that’s a classis "distinction without a difference." Progressive then compounded its mistakes by issuing a series of sugary but irrelevant Tweets, and then later withdrew the Tweets.
It remains to be seen how much the storm actually will cost Progressive. In reality, the observable, actual cost may be very low in the short term. There will, however, be many future jury trials involving Progressive, and it now has a new degree of risk that it created.