Hacker News Reader

Comment by sharkweek | Hacker News Reader

The absolutely most fascinating part of this is learning how McKinsey has long argued that making recommendations that businesses may or may not act on does not create legal liability (until this).

I’m trying to see that argument applied in any other instance and it becomes totally ridiculous.

“You see, your honor, I merely suggested to my client that he kill his neighbor in order to take his land, I didn’t think he’d actually DO it!”

View on HN

>>As part of the settlement, McKinsey admits to no wrongdoing. https://www.npr.org/2021/02/04/963864747/consulting-giant-mc...

That’s incredibly normal. It’s a regularly negotiated term that’s used to shield the wrongdoer from continued civil liability.

Frankly, I think it’s such transparent bullshit that we should abolish it. Really, you admit to no wrong doing but you’re willing to fork over half a billion because ...?

If you're going to be made to pay out and concede liability, why not simply go to trial and suffer the same legal fate? It's not there as a mere legalese recitation or to shield the defendant's ego. To finish your rhetorical question, the reason you pay out but admit no wrongdoing is in recognition of the risk of financial liability stemming from the litigation.

> why not simply go to trial and suffer the same legal fate?

The same reason most people take a plea bargain. Punitive damages. "Prison for six months, or the risk of a jury sending you to prison for ten years" is a pretty strong incentive to plead guilty.

If the punitive damages can be expected to be 10-20x of what you'd settle for, you'd probably just take the plea.

Yeah, but innocent people have to take pleas all the time because of it.

I want them to go to trial. I think it’s incredibly unseemly that we as a society bring down the hammer on individual drug dealers, but let corporate ones wash the blood off their hands with shareholder money.

Each one of these people deserves a pair of steel bracelets and their day in court in front of a jury of their peers.

I think McKenzie would be found innocent in a court of law. This is a settlement because they don’t want to be dragged through the mud in PR. They provided advice, the company chose to act on it. Unless their Advice Misslead regarding the legal risk, they are in the clear. If it was misleading, the damages would be to Purdue.

I’m no lawyer, but providing advice to a client who then goes ahead and breaks the law with said advice sure sounds like it meets the federal charge of conspiracy.

That really depends on the the advice is. I don't see a big problem with "This would make you a bunch of money, but you should have your lawyers look at it" or "this will make you a bunch of money, but has a high legal risk".

If the advice is: "this is illegal, and here is how to avoid getting caught" then I could see that being a crime.

You are adding requirements and escape clauses to the federal charge of conspiracy that are not actually in the law. Here is the relevant text of 18 U.S. Code § 371:

> If two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined under this title or imprisoned not more than five years, or both.

The question, fundamentally, is whether or not what McKinsey did counts as to "effect the object of the conspiracy". If yes, there is no magic "go talk to your lawyer" phrase to escape criminal liability, for the same reason why you can't bring a lawyer with you and depend on attorney client confidentiality to protect you from search warrants and prosecution.

Yeah, I agree with you. You would have to show intent to do something criminal at the core of it. I’m not sure that’s there for McKenzie.

If the law intended for there to be an intent requirement, then the statute itself would say “knowingly” or “willfully”, which it clearly does not. This means that one can accidentally commit conspiracy, so long as the law you’re conspiring to break does not have an intent requirement.

I think we might have to agree to disagree. My understanding is that the conspiracy must intend to break the law. If one party doesn’t know the other is breaking the law, it isn’t conspiracy. If McKenzie didn’t have any illegal recommendations, or knowledge of illegal actions, they are in the clear.

If they advised Perdue to do something illegal, that is a different story

> My understanding is that the conspiracy must intend to break the law.

As a general rule, this is not how laws work. There are some laws that require that you know what you're doing is illegal (tax evasion is one of them), but most laws do not work this way.

I agree in general, but conspiracy is one of the few that do. They are called crimes of "specific intent".

>Conspiracy is a specific intent crime. Specific intent crimes require that the defendant act with a specific goal in mind. In the case of conspiracy, the defendant must intend to agree on a plan to commit an act and must intend to achieve the illegal goal of the conspiracy.[15] If either of these intents is missing, then the defendants cannot be charged with conspiracy.

>https://lawshelf.com/shortvideoscontentview/criminal-conspir...

That's a pretty standard part of settlements, and very nearly semantically void.

The more salient facts for someone who's looking to this as an instructive story are: they advised a company to do some things that had some pretty hefty consequences, those consequences came back to bite them, and it cost them $573M plus legal fees and damaged reputation.

$573M is $573M, regardless of whether a court orders you to pay it, or whether it's the amount you're paying to avoid having to find out how much the court would order you to pay. The fact that no ruling went onto the books is small consolation.

That if anybody sues you for the same thing you've already been investigated and fined for, they had better have enough money to relitigate the entire thing is more than a small consolation, it's a public subsidy.

We should do away with settling out of court without a statement of who is at fault. The court could reject the settlement if the core issue of the case is not addressed.

By way of analogy this is why it’s a needed change. Applying settlements to criminal law I could murder you, and settle the case for some dollar amount and not have to admit guilt.

In short settling out of court is a way for the wealthy to avoid meaningful penalties.

I don’t think it was a criminal case but a civil one. The plaintiff can drop it if they want.

Yeah, if "simply carrying out orders" is not an appropriate defence then "simply given advice on orders" isn't either. Both are caught in the gravitational field of the guilt of the person in the middle.

Note that the only other place it works like this law. Lawyers are always "providing advice" about complex legal matters, with no actual responsibility for the outcome (with limited exceptions). So the idea that lawyers would apply similar logic to a reasonably-similar circumstance (in terms of complexity, difficulty, potential liability, etc.) is not unreasonable.

I don't know about the US but lawyers in the UK most definitely have liability for what they recommend - if a lawyer gives me advice that ends up causing me £X because it was legally wrong then I'd have a pretty good case for a claim on their professional indemnity insurance.

Only if you can show negligence

What? Lawyers are absolutely liable. Their only shield is in the most complex realms where the actual legal theory isn't yet tested in court / with a regulator, so you know going in their advice may not pan out, because it's /experimental/.

That's not the vast majority of law, though.

Are they actually legally liable in this case or just paying a settlement to get their name out of the press and get away cleanly from the issue?

One would have thought that at least one person on their in-house counsel team would have heard the term "civil conspiracy" before.

This case aside, isn't that a well accepted legal doctrine? Encouraging someone to do something is rarely a crime. Incitement to riot is the only exception I can think of.

I think there are times when this disclaimer makes sense. Industry regulation can be quite complicated and nuanced enough that an action might be illegal despite not seeming so on the surface. They also can vary between jurisdiction.

Having an experienced industry lawyer review future business plans is just good sense.

Reply on news.ycombinator.com