New Zealand Law Society - Covid-19: textbook crisis lessons for in-house counsel

Covid-19: textbook crisis lessons for in-house counsel

Covid-19: textbook crisis lessons for in-house counsel

Covid-19 provided the ultimate challenge in crisis management to in-house legal counsel. McDonald’s New Zealand’s General Counsel, Malcolm Swan, shares how they managed the crisis that involved 170-plus local stores and 10,000 staff. Phil Knipe, long-term Chief Legal Advisor from the Ministry of Health also had to mobilise his team of 11 in Health Legal for what has turned out to be the busiest period in their already very busy working lives.

Covid-19 provided the ultimate challenge in crisis management to in-house legal counsel. It was a text book crisis: evolving, changing situations, where there is no certainty, with operations turning reactive, responsive, to get through it.

Yet many in-house counsel had a plan, of sorts; and some in-house counsel now report greater comfort with uncertainty amongst their teams, and amongst their executives. How did they get to that position?

Remember back at the start of Covid-19...

It was February 28, 2020. New Zealand reported its first case of SARS-CoV-2. That case sent a tremor through the community. Numbers continued to escalate through March, and on 19 March New Zealand’s borders were closed to all but residents.

The first lockdown began on 25 March 2020. The rest, as they say, is history: in this case, very recent history that is continuing to be created.

In March 2020, though, inside organisations throughout the land, in-house counsel had been very, very busy.

McDonald’s New Zealand’s General Counsel, Malcolm Swan, takes up the story.

Malcolm Swan

“We’d already established an emergency response team. We’d been going through various other “Levels” at that point, so lockdown wasn’t entirely unexpected. Because McDonald’s is a global business, we’d seen what our other colleagues had been dealing with around the world, so we had a sort of sense of “not if, but when”. What we weren’t prepared for was the Government’s immediate, strong response which closed borders and essentially our entire business for five weeks. We kind of thought we’d still be able to operate as a drive-through, or contactlessly, as other countries had.”

The urgent issues for McDonald’s were: what to do with stock, with equipment – some of which was never meant to be turned off. They wondered if it would turn on again at the end of lockdown.

“Most importantly,” continues Malcolm, “what about our people? The first thing that came to mind was: if we’re not earning, if we’ve got no revenue, how are we going to pay our staff?”

McDonald’s has more than 10,000 staff in New Zealand, so the problem was real. Luckily there was government assistance, and a willingness to do the right thing by their people; and it’s important to point out that they have made no-one redundant in two years. But ensuring staff were paid was no easy street, to start with.

“Unfortunately, the rules (around Government assistance) were not that clear to begin with,” says Malcolm. “We were working with untested legislation, unclear drafting, and no-one who could give any certainty. We just had to work our way through it and make some best guesses.”

Behind the scenes, at McDonald’s it was ‘all legal hands on deck’ to support the crisis management group which had been set up.

“Essentially, we had to drop everything. We had to deal with what was in front of us at that point,” he says. “We were dealing with daily issues: questions from franchisees, questions from the business. Global McDonald’s wanted to know what was happening...”

The problem with perishable stock – massive in a restaurant operation of more than 170 stores – needed fast reaction.

“The whole supply chain was thrown on its head,” he says. “We’ve got some products that have a reasonably long shelf life because they’re frozen. Others – like lettuce and cheese for example – don’t last very long. We gave a lot to food banks, a lot to charity, a lot to Ronald McDonald House.”

Because McDonald’s New Zealand has a “very good logistical partner”, the company found a great deal of understanding from growers and suppliers.

“But, obviously, they had their own problems,” says Malcolm.

For McDonald’s New Zealand, there had been some large building projects underway when the country went into lockdown and that had legal implications.

“If you think about it, we are also a property business,” says Malcolm. “So, any construction that might have been under way, any refurbishments, new restaurants or whatever, had to be put on hold. Work just literally stopped. It was quite unreal, bizarre really.”

Ministry of Health’s response team

Meanwhile, in the Ministry of Health, long-term Chief Legal Advisor Phil Knipe had mobilised his team of 11 in Health Legal for what has turned out to be the busiest period in their already very busy working lives.

That team is usually responsible for advice on breaches of health legislation as well as enforcement, and so they were initially responsible for drafting Section 70 Health Act Notices and Epidemic Preparedness Act advice, which were part of the pandemic response. As the Covid-19 response developed, Crown Law and Parliamentary Counsel came into play, picking up responsibility for drafting various legal instruments.

Phil Knipe

The legal team began work at the end of January 2020, and went through an evolution for the next month, as the pandemic escalated.

“We had already been heavily involved in supporting the Government and adapting to the new situations as they arose,” he comments, adding: “We had done some planning for the event of a pandemic. We had guidance already to go that we were able to review and apply, which remained appropriate as part of the initial stage of Covid-19 response. Like the rest of the public service, we were agile.”

“I always recognised that as part of my role, there would be a need for a response to public health situations. It was always a possibility. I just hoped ...that the situation would never be as severe and prolonged as the current Covid-19 response has been.”

Notwithstanding that, looking back, Phil says the one change he would have made knowing what he now knows is that he would have prioritised more resource initially, to the pandemic.

“Back in January 2020, there were two of us in the team who dedicated ourselves specifically to Covid-19 work,” he says. That number quickly grew, and they continued to work closely with relevant public health staff, all of them juggling the priorities of a large programme of Government-led legislative, health initiatives and Covid-19 itself.

One great advantage, says Phil, has been the fantastic, talented and dedicated Health Legal team. “They have thrown themselves into addressing the challenges that have come up, often novel and urgent challenges.”

One of the first issues to arise was managing the situation regarding cruise ship passengers returning to New Zealand.

“There were also a lot of travel queries, and issues around eligibility for health services, as well as powers under the Health Act, and how far they extended,” he says.

Streets in Auckland empty during the Covid-19 lockdowns

Hot on the heels of that range of advice, the team also played a significant role in the operation of the Medicines Act and worked alongside MedSafe, for example:

“Dealing with issues around decisions on approval of medicines, prescriptions, when medicines can be dispensed, the on-going application of the Medicines Act to the approval of vaccines, especially when vaccines are new,” he says. “These are approvals that were given in a dynamic environment where there are significant expectations on decision makers.”

Apart from heavy involvement and support from Crown Law, the Health Legal team also used other networks in the Government Legal Network. They shared knowledge, expertise and contacts with other Government lawyers.

“There are weekly Chief Legal Adviser meetings to keep on top of matters and discuss Covid-19, amongst other things,” he says. “The Government Legal Network has various ‘practice groups’ to share knowledge. It’s worked well. Those connections have been particularly important for building relationships, responding quickly and knowing who to talk to in various agencies.”

As the pandemic continued, the Health Legal team gained greater and greater clarity through the outcome of court decisions too.

“We now have to draw upon that jurisprudence to assist with our advice, and in responding to new issues as they arise,” he says. But the real pillars of decision making were more philosophical.

“Underlying decision making were still the core factors that decisions needed to be lawful and they needed to be reasonable,” says Phil. “We went back to ‘what is the public health imperative?’ ‘what is the medical/scientific evidence to support the actions?’ then ‘what are the other legal considerations underpinning these decisions, including human rights justification?’”

Building confidence in an uncertain world

Back at McDonald’s, Malcolm Swan says the focus of the legal team changed during Covid-19.

“I think we were seen differently,” he says. Initially: “ felt like a lot of people were looking for legal guidance because a lot of the issues were legal issues. A lot of the issues came out of legislation, health orders or things the Prime Minister said at the time. It was: ‘what does she actually mean?’.”

“There were lots of issues around the wage subsidy for example..... part of the job of General Counsel is making the call: ‘well, this is our best guess, this is how we need to proceed.’...A lot of it comes down to ‘what’s the right thing to do.’ You can answer: is it legal? is it moral? or is this just the right thing to do? A lot of the call was just a gut feeling that it’s actually the right thing for our people. If you stick with that I don’t think you could go too far wrong, to be honest.”

A lot of the call was just a gut feeling that it’s actually the right thing for our people. If you stick with that, I don’t think you could go too far wrong...

He says that in the two years since the first lockdown, the team has become more efficient, more resilient and much stronger.

“It was a shock to begin with. Once everything had settled down, you settle into a rhythm. Then there’ll be another shock; there’ll be another announcement and we’ll have to deal with that; then it’ll settle down. There were peaks and troughs for a while – dealing with crises then going back down into normal routine. (Now) …..we’re definitely focused on the strategy and the pro-active risk mitigation, rather than day to day stuff that really wasn’t productive,” says Malcolm.

“Nobody likes uncertainty,” he adds. “But what we’ve learnt to do now is just go with the flow a bit more.....I think that’s made it a lot easier knowing we don’t know what’s around the corner.”

In the Ministry of Health, the demand on the team is large and decisions have to be made often at short notice.

“One of the things you’re always looking to do,” says Phil, “is to build public trust and confidence in the Covid-19 response; show that these are hard but informed decisions that are being made, that we’re looking out for the benefit of the population.”

Throughout the response, Phil points to the leadership he’s seen enacted as very helpful to his team, and to himself.

“The modelling of leadership and behaviour is very important,” he says. “One of the advantages for us in the Ministry is (seeing) how that’s been consistently modelled by Dr Ashley Bloomfield, Director General of Health and Una Jagose, the Solicitor-General. It’s useful for staff in terms of always recognising our own behaviour, holding ourselves to account and upholding what’s needed of us as public servants.”

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