Is Your Movie Ripe For A Lawsuit?

2011-10-24T11:26:00.000-07:00

Technological advances in digital cameras, editing and special-effects software has drastically reduced the cost of creating high-quality, feature-length films, resulting in an explosion of independent filmmaking. But even with hugely reduced production costs, one aspect of indie-filmmaking has not changed: the unwillingness to consult a lawyer until a lawsuit is seriously threatened. Most new filmmakers attempt to act as their own attorney but are rarely prepared to deal with the myriad of legal issues involved in the making of a movie, or understand the insurance requirements necessary to qualify their film for pick-up by a legitimate distributor.

Most legal claims against a creative project—a movie, television show, video or commercial—generally occur within the first 3 years and the more successful a project is, the greater the risk, as lawsuits inevitably follow money. The majority of these claims will be profit-participation disputes among the producers, writers and actors, which are not covered by Errors & Omissions or production insurance, but a great many will be of the frivolous “you-stole-my-idea” variety, filed by any writer who once pitched a romantic comedy involving a lovable slacker living in New York. And the novice filmmaker’s frequent use of generic contracts pulled off the Internet or from outdated film school handbooks is often detrimental, as these boilerplate contracts rarely cover all the scenarios that should be addressed.
A variety of factors can determine whether a film is vulnerable for a lawsuit and entertainment insurers have created ranking systems that can assess the likelihood of a claim being filed, either by those directly involved in the production or by third parties who claim their intellectual property rights or reputation has been violated.
First, the track record and background of the production company will be taken into consideration; the newer the filmmaker, the higher the perceived risk. Since the majority of production companies are only created for a particular movie, they are unlikely to have much history, so additional weight is given to the resumes of the producers and their past projects. Novice producers on tight budgets are known to cut corners, thinking they will get clearances for unlicensed music and photographs if and when the film actually sells, or not having consulted an attorney, they are usually unaware of numerous copyright laws which they have likely transgressed.

If the production company or producers have completed multiple movies unscathed, the insurer will want information about their in-house procedures involving script submissions and whether a submission agreement is required. A sloppy or non-existent logging system can lead to claims that the production company stole someone’s idea or plagiarized from a script which was allegedly discussed ten years ago in a bar or supposedly emailed to the producer’s assistant.
Next, the issue of originality will be considered. The insurer will want to know if the work is a newly written, original script, or is it based on a book or another movie? Insurers like fresh, new material, since a movie based on an older book is more likely to have complicated copyright issues and potential claimants lurking in the wings.
For a movie based on an older work, an insurer will often request copies of all copyright documentation to ensure that the producer or production company holds the necessary rights, which can stall production or the closing of a distribution deal.
More legal risk is added when the film is based on someone else’s work, such as a book or short story, especially when that book has been optioned by various producers over the years or, worse yet, was written before 1978. Works copyrighted before 1978 are covered by the Copyright Act of 1909, which can create situations where the heirs of a deceased author have the right to regain the copyright, even if the filmmaker had legally negotiated the film rights with the deceased author.
Generally, risk increases with each new addition of reality: a fictional story inspired by real events, a story about real events which incorporate a large degree of fiction, or the most dangerous, the “true portrayal” of actual facts, which can involve the tricky “fair use” doctrine and claims of 1st Amendment immunity. The insurer will want a lengthy explanation as to what elements of the script are pure fiction, what elements are fact, what living people are involved and whether the have sold the filmmaker the rights to their life story.
If the story is based on a living person, risk is lessened if there is a depiction release. Obtaining a depiction release will protect the filmmaker from being sued for defamation or invasion of privacy, especially if the filmmaker plans a less-than-flattering portrayal of the person in question. Depending on the type of film—for example, a documentary—it may not be necessary to have a release, but the insurer will want an explanation about how living people are portrayed and why there is no release.
On that note, the insurer will inquire if the person being portrayed in the film was approached by the filmmaker and then refused to sign-off. Is there any record of failed negotiations with living people who are being portrayed in this production? This could prove problematic, as they and their lawyers may be waiting in the wings, ready to take action if the final cut is not flattering.

Are there a large number of film, television and internet clips used throughout the movie? Lengthy shots of famous photographs and artwork, recognizable music and company
trademarks? All these spell potential trouble as it is unlikely a novice filmmaker with a small budget was able to negotiate and pay for use of these materials or, worse yet, believes they are in the public domain.
Most of the things that make a movie fun to watch also make a lawsuit more likely to occur, which is why action films are the riskiest, and thus the most expensive, to insure. For entertainment underwriters, the safest bet is a drawing room comedy, filmed on a soundstage in a professional studio, preferably with bullet proof walls and staffed with a round-the-clock medical team. Unfortunately, today’s moviegoer has a preference for more exciting fare and filmmakers do their best to oblige. Scenes shot from aircraft or skyscrapers, fight scenes, explosions, car chase scenes, actors on runaway horses, all increase the likelihood of a successful box office run, but also that something will go horribly, horribly wrong.
Pyrotechnics and gun use pose the highest risks; prop gun malfunctions have been known to kill or severely injure actors and crew, such as when Brandon Lee was killed by a mal-functioning blank cartridge on the set of The Crow. But even filmmakers who cannot afford elaborate explosions or car chase scenes increase their risk by simply deciding to film out-of-doors. Once the production leaves the sound stage and is exposed to the outside world, the opportunities for injuries—of the cast, crew and the public—greatly increase. Damage to private property, the risks of falling trees and electric wire, injuries sustained by curious fans, the possibilities are endless.
How can an action filmmaker mitigate many of these potential risks? Computer technology (CG EFX) has come to the rescue in a variety of way: explosions and pyrotechnics can be simulated, bloody wounds can be digital rather than created with fake blood and real knives, tidal waves, flames, animal attacks and collapsing buildings can all be safely inserted via FX software. Lower-tech strategies could include not filming in public areas, closing off outdoor filming areas to the public, limiting contact between actors in fight scenes, limiting contact with animals and/or employing trained animal handlers, using fake rather than real weapons and hiring experienced stunt people with lengthy resumes.
Filmmakers should always verify the credentials of stunt coordinators and stunt performers, as currently there is no certification process for these roles. For animals to be used on set, do not hesitate to spend the extra money to use a professional animal handler and ensure that these animals are trained for film use and are not simply someone’s pet.
Finally, while insurance can relieve the producers of many potential legal expenses, they must be scrupulously honest when filling out the insurance application forms; if any information is untrue or any relevant event is overlooked or concealed, the claim may not be covered and the full cost of the lawsuit would revert back to them.

Raymond D. McElfish is the president of McElfish Law Firm in West Hollywood, CA. He specializes in insurance coverage litigation.
On the web: www.mcelfishlaw.com

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Is Your Movie Ripe For A Lawsuit?