PRODUCTION TIPS: It's Better to Avoid a Lawsuit Than to Win One pt. 3

In parts 1 and 2, we covered the reality of being sued and ways to minimize the chances of that happening (and losing) by essentially displaying common sense, taking the time out to make sure 'things are what they seem' and getting everything in writing.  Producers and filmmakers with money hire lawyers and others to do all that work for them so they can focus on the fun stuff like directing scenes or hobnobbing with actors and financiers. The true no-budget filmmaker can't hire a lawyer to do the work but the work still needs to get done somehow.  This series has been an attempt to provide no-budget filmmakers, like you, some guidelines to help you organize and minimize your risk.*

1. INTERNS.  'Everyone loves PA interns cuz they work for free, right?!?' Wrong. The Blackswan case was a wake-up call for the industry; your interns are not a way to get free labor.  For far too long, interns have been used in abusive manners (even if the producers didn't intent to abuse the interns). The clearest rule to remember regarding the use of an intern in your production is that they are there for THEIR benefit. The job they do should be something that benefits them because they learned something or gained a valuable experience.  And a big no-no is using an intern to replace someone you would actually hire.  It's ok to use interns in your no-budget production but use common sense and provide an actual opportunity that benefits them. If you want some tips on using interns... here you go.
2. 1st AMENDMENT RIGHT vs. PUBLICITY RIGHT.  Publicity rights are the rights an individual has to control the use and likeness of their name in a commercial setting. Filmmakers sometimes shoot a documentary or a fictional narrative based on the life of a person or a fascinating event.  In those scenarios, a problem can arise when someone's publicity rights (as the person on which the film is based on or the person depicted in the film or the person being interviewed in the film) comes in conflict with a person's rights under the 1st Amendment (freedom of expression). Basically, the general rule is that rights under the 1st Amendment trump publicity rights. Thanks to the 1st Amendment, journalists and writers can write freely about others without their consent.  And depending on the context of your film, courts could decide that your film should also have that privilege.  But when you are a no-budget filmmaker who hopes to avoid being sued it pays to play it safe and just get a written signed release from people who will be the subjects of your film.
3. DEFAMATION. Defamation is communication that harms the reputation of another person so as to lower her status in the eyes of the community or deters people from associating or dealing with her.  There are 2 types of defamation; libel (which is embodied in a physical form, for example in print) and slander (which is spoken).  The classic victim of defamation is someone who suffers embarrassment and humiliation, as well as economic losses, like a job.  There are some defenses and privileges that a filmmaker can depend on to avoid losing a defamation case like telling the truth or relying on communications that occur during judicial, legislative and executive proceedings or communicating about public figures and public officials.  As a result, some things you should do to avoid problems are:
• Avoid portraying individuals who are not public figures or public officials.
• Be able to prove that a so-called defamatory statement is the truth.
• Have everyone appearing in the film or who the script is based on sign a release.
4. REVIEW THE FILM. Part of the luxury of paying an attorney to work for you from the development stage until distribution is that she will be responsible for things like drafting all the different funding, employment and location agreements and release forms you will need, making sure they get signed and stored in a safe place, doing the due diligence on the people signing to make sure they are who they claim to be, reviewing the script and the film for potential liability risks and more. But since you are doing it all yourself, you have some extra jobs to do:
• During development, review the script and then during postproduction, review the finished film.  Both times you are looking for potential liabilities regarding publicity rights, defamation and privacy rights among other things.  Specifically, you're looking for mentions or recordings of and about people and products that you may need to get releases from.  Make a list then get signed releases or delete them from the script or finished film.
5. E&O INSURANCE. You may not be able to afford a lawyer but if you are trying to get your no-budget film sold to a distributor, you are going to have to get Errors & Omissions (E&O) insurance.  E&O insurance will help you keep your personal assets in case you lose a lawsuit or have to settle.  E&O protects the policy holder from claims for defamation, invasion of privacy and trademark/copyright infringement. Distributors want to see your E&O policy because they are not interested in buying something they might later have to go to court for.  Shop around and look for insurers that specialize in media and film production policies that cover the most important exposures then assess the dollar amount of coverage, the insurance company, the broker and the value (the coverage received for the amount of premium paid). By the way, E&O insurance is separate from the insurance you might purchase to pay for accidents or losses that affect the people or equipment on the set. Check out the "Film Production Insurance Primer" in the LEGAL section of the Filmmaker/Production Toolkit for more details.
6. CHAIN-OF-TITLE. If you have made it to the point where you have a distributor interested in buying your no-budget film, then you will be asked for a "chain-of-title." A chain-of-title in the film industry is the series of documents that establishes a producer's right to use the copyrighted material by tracking that right from the author or owner of the copyrighted material to the producer through a "chain" of assignments and transfers. To make your distributor happy, you will obtain a copyright report for your film and present it to them along with your E&O insurance policy and your chain-of-title. Now you're happy too because you made it this far.
7. MONITOR THE FILM AND KEEP YOUR PROMISES. Even after you sell the film and the film makes money, there is still work to do.  By this point, you should have the money to hire lawyers and accountants to monitor the film once it's in the distributor's hands but you have a DIY attitude so you are still doing it yourself. And so, regularly monitor the performance of your film.  You might never get the net profits promised in the distributor's agreement no matter what you do but it's still your job to track and ask. Monitor the film's performance in all the different markets your distributor is responsible for and request audits from time to time to make sure they are keeping their promises to you as agreed. In a related note, just like you want the distributor to keep their promises, keep your promises to your investors (if any) and to your cast and crew who you hired on a contingent compensation basis through deferments and net profits.  At the time, they worked for you for "free" because you had no money; now that you have money, do right by them and pay them. Or they will sue.  Same thing with your crowdfunders, give them what you promised on your crowdfunding campaign. Or face a lawsuit and other problems like job loss and depression. 

Everyone has a role to play in ensuring the success of a production and even the most talented and detail-oriented producer will be overwhelmed by all the "hats she has to wear." But no-budget filmmakers take the DIY route because they believe in their vision and story so much that they need to shoot it NOW. Although that passion is commendable, if you are that filmmaker, it's always better for you to get the necessary money needed so you can hire and delegate the varied tasks of your production and see it through to the end. Doing this will allow you to focus on the most important task of all in your production; telling a good story with an effective and creative use of visuals, sound, dialogue, acting, effects, production design and music.

Read part 1 and part 2.  

*Remember this isn't legal advice so use it at your own risk but don't hesitate to contact me if you have questions or comments at danny@djimlaw.com.