Month: November 2025

Business responsibility for the content of opinion formers and the cost of mistakes

Posted on by avocad_bxgv12hf

With Black Friday approaching and social media advertising at its peak, businesses are increasingly turning to opinion leaders, also known as influencers, to communicate. Such campaigns generate a lot of attention and sales, but they also carry risks - especially when content is created quickly, sometimes without all the details being confirmed. This makes the question of who really owns the content and who is responsible for its accuracy particularly relevant.

Kamilė Žilinskytė, Senior Associate at AVOCAD, stresses that this responsibility is not unambiguous. She says that businesses often make the mistake of believing that only the content creator is responsible for the statements of the opinion-maker, but the legal framework shows that the responsibility is often shared. "Businesses need to be aware that when they work with an opinion-maker they share responsibility for public communication. If there is little or no control over the content, not only consumers but also regulators may have to explain themselves," she says.

The law is clear that advertising on social networks must be identifiable, truthful and not misleading. The Law on Advertising, the Law on Prohibition of Unfair Commercial Practices for Consumers and the guidelines of the State Consumer Rights Protection Authority (SCPRA) stipulate that the content of advertising must not contain unsubstantiated claims, concealment of material facts or artificially induced discounts. The message must be labelled as an advertisement, but labelling alone does not guarantee that the communication will be considered legitimate - businesses need to ensure that the information disseminated by the opinion leader is accurate and substantiated.

According to AVOCAD lawyer, this trend is confirmed by the recent case law of the Supreme Administrative Court of Lithuania, which notes that not only the advertiser but also the advertiser may be held liable for the dissemination of misleading advertisements, provided that three conditions are met: (1) the disseminator knew or should have known that the advertisement used did not comply with the requirements of the law; (2) the disseminator knew or should have known that the requirements of the law were violated as a result of his/her actions in the production or dissemination of the advertisement; (3) the disseminator is unable to provide evidence that would allow the identification of the advertiser (producer). This means that both the brand and the opinion-maker can be seen as jointly liable entities, and it is not enough for a business to formally state that certain information was an "influencer's interpretation".

The question is whether a business must review every social media post and story. According to Kamilė Žilinskytė, the law does not directly impose such an obligation, but it is up to the business to ensure content control mechanisms. "Businesses are not obliged to check every post to the minute, but there must be a clearly agreed procedure: what can be posted, what information must be checked, what phrases cannot be used. If everything is left to 'free creation', the responsibility often falls on the shoulders of the business", she stresses. This is especially true during Black Friday, when campaigns are intense, discounts change several times a day and mistakes can lead to both financial and reputational losses.

An opinion-maker can be considered a brand spokesperson even if he or she does not have official status. It is sufficient that he or she uses the brand's visual style, speaks in an "us" form, refers to information provided by the brand, or communicates in accordance with the brand's clearly defined instructions. In this case, the content he or she produces is seen as part of the brand's communication and therefore becomes a shared responsibility.

To defend yourself in a dispute, documentation is key. Contracts, briefs, content guidelines, a history of approved records and written communications about discounts, codes, stock or product features are key evidence that the business gave the right instructions. If the inaccurate information is due to carelessness, error or self-interpretation on the part of the opinion-former, it is these documents that can help the business to prove it.

In preparation for the intense Black Friday sales, it is important for businesses to develop a clear process for controlling content, to address all aspects of communication in contracts and to monitor the reputation of the opinion leader. Each statement, visual or discount reflects not only their creativity but also the values and responsibilities of the business itself.

"Every word in the recording is a communication on your behalf. Therefore, the content must not only be attractive, but also legally safe," stresses AVOCAD Senior Associate Kamilė Žilinskytė.

If the insurer doesn't come to inspect the damaged property within 3 working days, you can call an independent valuer 

Posted on by avocad_bxgv12hf

When the responsible insurer delays inspecting the property and assessing the damage after the accident has been reported, the victim is left in a quandary - what to do: wait or act? According to Julius Sakalauskas, attorney at law and insurance law expert at AVOCAD, when the responsible insurer fails to make the necessary efforts to determine the consequences of the insured event and the amount of the insurance claim after the notification of the accident, and fails to inspect the damaged property within 3 working days of the notification of the injured party, and calculates the insurance claim at an unreasonable amount, the injured party has the right to turn to a property appraiser, and the insurer is obliged to compensate for the costs of the injured party.

The insurer delayed and underestimated the damage

The lawyer gives the example of a case in which it was established that the plaintiff's Volvo S60 had been hit by a BMW driven by a drunken driver in a yard. The accident was recorded by the police and the damage had to be compensated by the insurance company with which the perpetrator's civil liability was insured.

The claimant submitted the accident report and all documents in its possession, including photos of the damage to the car, via the insurer's self-service system. However, although the responsible insurer had doubts as to the extent of the damage to the applicant's car, it failed to inspect the damaged car within 3 working days of receiving the applicant's written notification of the accident and provided a damage estimate which did not reflect the applicant's actual loss at all.

Disagreeing with the insurer's calculation of the amount of damage, the claimant engaged an independent valuer of movable property, who found that the actual replacement value of the car was much higher. Although the insurer recalculated the damage and paid higher amounts after receiving the appraiser's estimates, the insurer still refused to reimburse the costs incurred by the claimant for the appraisal services.

The claimant had taken the claim to court and the final judgments of the courts had established that the insurer had failed to fulfil its obligation to inspect the damaged property within 3 days, and the claimant was justified in seeking the services of an independent expert and had the right to engage a lawyer as a representative, and the claimant was therefore justified in deciding that the costs of the appraiser and the lawyer were to be compensated.

The court's interpretation: the insurer must act quickly and in good faith. And how does this work in practice?

The Court stressed that according to the Law on Compulsory Motor Third Party Liability Insurance, if the authorised person of the liable insurer has not arrived within 3 working days from the date of receipt of the written notification of the accident by the injured third party and the inspection has not been carried out remotely, the injured third party has the right to obtain the valuation of the property in order to establish the amount of the damage caused to the property. In such a case, the responsible insurer must also reimburse the costs of the property valuation services incurred by the injured third party at market prices.

The right to inspect the damaged property remotely cannot be interpreted in isolation from the insurer's obligation to inspect the property within the time limit laid down in the Law, i.e. within 3 working days. Irrespective of the manner in which the insurer carries out the inspection of the damaged property, whether in person or remotely, it must be carried out within the time limit laid down in the Act, by means of a document of one kind or another (inspection report, technical inspection report, etc.).

In the case of compulsory insurance, insurers are obliged to calculate the costs of necessary repairs to the victim's damaged property on the basis of the average rates for the work and the parts and/or components to be replaced, corresponding to the level of technology in accordance with the recommended time standards, and not on the basis of the lower rates offered by the responsible insurers' partner garages, which may not even have the equipment to carry out the required level of repair, or the discounts that they offer to insurers.

"This decision very clearly draws the line once again: insurers cannot delay investigations of insured events and cannot abuse their position by offering to pay clearly unjustified insurance benefits to victims", notes Julius Sakalauskas.

"A fair assessment of damages should not be a subject for negotiation, but a legal obligation. Insurance companies that ignore this duty risk not only financial losses but also their reputation. If an insurer increases the payout several times only after a claim, it is a sign that the assessment of the damage has not been carried out properly," the lawyer concludes. This is an important legal balance between the businessman, the professional insurer, and the victim, who often does not have the knowledge and time to argue with the insurer over every single bolt in the repair estimate, and ends up throwing up his hands in the end.

This precedent strengthens the position of victims in disputes with insurance companies, as the courts have emphasised not only the formal observance of the time limits for investigating insured events, but also the insurer's professional duty to act diligently, proactively and in good faith. Thus, according to AVOCAD's counsel, if the responsible insurer or its authorised person does not inspect the damaged property within 3 working days of the victim's notification of the accident, the victim has the right to obtain a valuation of the property in order to establish the amount of the damage caused to the property, and in such a case, the responsible insurer is obliged to compensate for the cost of the valuation of the property incurred by the injured third party, which is at the market price.

What it's really like to be a suspect: from suspicion to acquittal

Posted on by avocad_bxgv12hf

Criminal proceedings are often intimidating, not only in terms of their legal consequences but also in terms of the emotional burden. Egidijus Kieras, a lawyer at AVOCAD who also works with complex criminal cases, shares what the status of a suspect means, how the process changes and why the presumption of innocence is more than a theoretical rule. According to him, although it is often said: "if you are innocent, there is nothing to fear",anyone who has been involved in a criminal trial at least once knows that being a suspect is not only a legal status, but also a huge psychological and reputational burden.

Suspicion is not a conviction

The start of a criminal trial always seems dramatic - questioning, searches, arrests. The public tends to assume that if a person is under suspicion, he or she "did something anyway". However, in legal terms, according to the lawyer, suspicion is only the initial stage of the process, which may or may not turn into a criminal case. A suspicion is raised when pre-trial investigators consider that there are sufficient grounds to believe that a person may have committed a criminal offence. This is not a fact, but only a presumption that allows an investigation to be opened. The purpose of the pre-trial investigation is to establish whether or not a crime has been committed.

The lawyer notes that in practice, it is often the case that suspicions are made, but the case is later dismissed due to lack of evidence or because it turns out that no crime has been committed. However, the very fact of being suspected already affects a person's life - reputation, business, family relationships. Therefore, according to Kier, it is important to realise that an allegation is not a guilty plea. It is only a temporary procedural situation, which is not intended to punish or somehow aggravate a person's situation, but on the contrary, this status gives the person who is caught up in such a situation more rights:

  • receive information about the status of the criminal proceedings against him or her, and know what he or she is suspected of doing;
  • have a lawyer from the moment of arrest or first interrogation;
  • receive interpretation and translation;
  • inform consular offices and one person;
  • get emergency medical help;
  • to know the maximum number of hours (days) that his or her liberty may be restricted before the start of the trial, and to be informed about the regular review of detention and the possibility of alternative measures to detention;
  • give evidence;
  • remain silent and/or refuse to testify about your own possible criminal offence;
  • provide documents and objects relevant to the investigation;
  • make requests;
  • to make representations;
  • access to the pre-trial investigation file;
  • appeal against the actions and decisions of a pre-trial investigation officer, prosecutor or pre-trial judge
  • to be accompanied by a legal representative at court hearings and other procedural steps, as well as the right to privacy when the suspect is a minor.

From suspect to accused

The lawyer points out that pre-trial investigations can end in one of two ways: by being closed or by being referred to court. If the pre-trial investigation is closed, the allegations are dropped. If, on the other hand, sufficient evidence is gathered during the investigation, an indictment is drawn up and the case is referred to court, and the suspect's status changes - he becomes the accused. Thus, if the proceedings are at the pre-trial stage, the person is a suspect; if the case is already before the court, the person is an accused. After the trial, the court passes a verdict and the person becomes either acquitted or convicted.
"However, even at this stage, the presumption of innocence still applies: as long as the court has not convicted, the person is presumed innocent. This constitutional rule is often forgotten, not only by society, but sometimes also by the institutions," says Egidijus Kieras.

The road to acquittal can be long

Acquittal is not a sudden triumph, but often a multi-year struggle that requires emotional stamina and financial resources. Even when a person is finally acquitted, his or her life is changed - business partners, reputation and trust are lost. "Unfortunately, public opinion rarely catches up with the court's decision: the accusations are on the front page and the acquittal is on the back page," says an AVOCAD lawyer.

Anyone can be a suspect - from a business owner to an ordinary employee. "All it takes is one complaint or misjudgement to put a person in a situation that is not always easy to get out of," Egidijus Kieras points out,

According to the lawyer, it is very important that every suspect knows his or her rights and exercises them, not only when establishing the fact of the crime itself, but also when imposing the penalty (which depends directly on aggravating and mitigating circumstances), and even when granting exemptions from criminal liability (bail, reconciliation, minority, etc.)

 

Reckless treatment of animals - the path to criminal liability 

Posted on by avocad_bxgv12hf

Who is responsible when a dog bites a person? Is it enough to say "it ran away by itself"? Or is it the actual possession of the animal that is more important in court than ownership? According to Domantas Velykis, a lawyer at AVOCAD, careless behaviour or a lack of security can lead to criminal liability.

In Lithuania, the rules for keeping animals are strictly regulated by the Law on Animal Welfare and Protection of the Republic of Lithuania, which sets out how state and municipal authorities, as well as animal keepers themselves, have to ensure the well-being of pets and the safety of people. The law establishes general rights and obligations for animal owners - for example, that animals must not pose a threat to the life, health or property of humans or other animals. On the basis of this law and the functions entrusted to the State Food and Veterinary Office, a description of the procedure for keeping animals in residential areas has been drawn up. On the basis of this, the mayors of the municipalities approve specific rules on the keeping of animals in their municipal territory. "A person who violates these rules and causes injury to another person as a result of an animal may be criminally liable for bodily harm. In such cases, it is usually negligence - criminal negligence in failing to take the necessary safety precautions - that is at issue," says the lawyer.

As with other crimes of bodily injury, according to AVOCAD lawyer Domantas Velykis, the offence is qualified according to the extent and consequences of the injuries. Most of these cases fall under the category of negligent infliction of minor bodily harm, and the following is a discussion of the elements of this crime and the case law of the Supreme Court of Lithuania (SCL).

The lawyer points out that the qualification of the offence does not depend on whether the person is the owner of the dog, but only on whether he is the actual keeper of the dog. What is relevant is the fact of the injury itself, which is caused by the negligent behaviour of improper keeping of the animal. Therefore, for criminal liability, it is sufficient to prove the actual ownership or possession of the dog. Anyone who negligently injures or maims a person, provided that the injury or maiming results in partial incapacity for work or a prolonged illness, but does not have serious consequences, is liable to criminal prosecution. The offence in question is committed only with negligence.

Under the Criminal Code, criminal negligence means that a person:

  • did not foresee that his actions or omissions could lead to harmful consequences, such as that the person does not realise that he is violating generally accepted rules of care or special requirements for carrying out work and therefore does not foresee that his actions (acts or omissions) could lead to dangerous consequences, in this case, injury to a person;
  • could and should have foreseen the consequences of the act, given the circumstances of the act and the personal characteristics of the person concerned - the ability to foresee the consequences is a subjective criterion of criminal negligence, which determines the ability of a person with a relevant duty to foresee the dangerous consequences of his or her actions in a particular situation. The ability to foresee the consequences is an objective criterion of criminal negligence, which establishes the existence of a duty of care when committing the act in question.

"In other words, the ability and capacity to foresee the consequences characterises a person's duty of care to foresee potentially dangerous consequences," says the lawyer.

In a landmark Supreme Court case, a dog owner failed to ensure that two Rottweiler mixes she kept would not pose a threat to others, in breach of legal requirements. Knowing that a child was nearby, she opened the aviary and let the dogs out in the yard. One of the dogs attacked the minor, causing minor injuries. Although the keeper argued that she could not have foreseen this behaviour, the Court notes that she should and could have foreseen it, knowing that the child, a stranger to the dogs, would be attacked and injured by the dogs, which were defending their territory from unauthorised persons, when she opened the car door to enter the yard. Therefore, the keeper should have taken additional precautions (e.g. locking the car door or creating a barrier to access to the yard).

"In another case, the defendant was acquitted because the dog was locked in a room and only escaped when the guest opened the door - in this case, the owner had taken reasonable security measures," Domantas Velykis says, summarising the case law. In another case, a dog owner was convicted for a dog that broke loose from a chain that was too loose and ran into a public road, biting a woman and her pet. The Supreme Court stressed that it is not enough to tether a dog if the strength of the chain or collar is not ensured.

Thus, according to AVOCAD's lawyer, an animal keeper has a duty not only to take care of the welfare of his or her pet, but also to ensure that the pet does not cause danger or harm to third parties. Negligent behaviour or failure to ensure safety can lead to criminal liability under the Criminal Code.

 

Bonds: a popular but risky financing instrument

Posted on by avocad_bxgv12hf

Recently, new bond offerings have been hitting the market almost every week. In many cases, the new bond issues are refinancing previous issues or additional placements when the first one failed to raise sufficient funds.

Bonds are becoming an increasingly popular financing instrument, targeting not only institutional investors but also the consumer retail market, but the latter are not always able to properly understand and assess investment risks. Increasingly, bonds are being offered to the general public, people who are not always able to properly assess the degree of risk and the purpose of the issue. A bond is essentially a loan with a fixed interest rate. Therefore, by investing, a person is effectively making a loan to the issuer - which means that he or she is taking on the risk of the creditor.

Despite its fancy name, a bond is simply a loan with a fixed interest rate. If the issuer fails to redeem the bond at maturity, the bondholders become creditors, whose order of claim depends on whether the bond was secured and what kind of security was provided. In essence, bonds create a loan relationship between the bond holder and the issuer. A decision to purchase bonds is therefore equivalent to a decision to grant a loan. In some cases, bonds distributed by the private sector are still equated with government securities, which are even safer than bank deposits and are more of a savings than an investment instrument. Buying private sector bonds is not saving but investing. Therefore, in order to assess the risk, the investor should understand to whom the loan is being lent, for what purpose and under what conditions the funds will be repaid.

The most common types of bonds offered on the market can be categorised according to listing and collateralisation criteria. Listed bonds are securities traded on stock exchanges. Listing bonds provide liquidity, as holders can sell their bonds at any time at the then current market price and thus recover at least part of their investment or even make a profit, depending solely on the market price of the bond. Unlisted bonds, on the other hand, do not have liquidity, so that the funds invested will, in principle, only be recovered at the end of the bond's term. Bonds are also divided into secured and unsecured. The key difference is that if the issuer is unable to redeem the bond, the proceeds from the realisation of the collateral (e.g. real estate, securities or other security) will be used to repurchase the secured bond.

In the case of unsecured bonds, if the issuer fails to redeem the bonds at maturity, the bondholders become third-ranking creditors, after mortgage creditors, the tax authorities and employees. This means that in the event of the issuer's insolvency, bondholders are unlikely to recover anything. In the event of an issuer's bankruptcy, unsecured bondholders are often left without any compensation. It is therefore necessary to look at what exactly the issue is secured by - whether it is a real asset or just a pledge of shares, which is often formal in nature.

What should be valued and understood?

For secured bonds, it is important to consider what is being pledged and the possibilities of recovery from the collateral. In some cases, existing or developing real estate is pledged - this type of collateral provides the greatest protection for bondholders and ensures that a larger part of the investment will be recovered, even in the event of failure. The situation is slightly different for bonds secured by a pledge of the issuer's shares. In some cases, the issuer does not carry out any activity itself, but lends the funds raised to the company developing the project. In other cases, the shares of the project company itself are pledged, but, as a rule, the assets of the project company are already pledged to the financial institution. Thus, in the event of failure, the result will be the same as with unsecured bonds. A security instrument only has real value if it can be effectively recovered. If the collateral is already encumbered by a bank mortgage, it often offers no real protection to bondholders.

Understanding that bonds are a risky investment, it is important to consider the purpose of the borrowing and the sources from which interest will be paid and the bonds repurchased. In some cases, bonds are used as bridge financing. For example, bonds may be used to finance the construction of a real estate project, with a view to mortgaging the property to a financial institution and then redeeming the bonds with the loan proceeds. In this case, the refinancing risk should be assessed. If bank financing is not forthcoming, e.g. due to insufficient cash flow, the issuer may have to issue a new issue. However, there is no guarantee that the market will accept it.

Alternatively, the bond proceeds can be used for construction work on a real estate project, and then the property is disposed of, with the proceeds used to redeem the bond. In any case, when valuing a bond, it is important to understand not only what the funds will be used for and how they will be repaid, but also how much equity is being invested in the project by the issuer or by its affiliates and controlling persons. The presence of equity indicates that the issuer has confidence in the success of the project. The higher the contribution, the stronger the incentive to maintain the project even in the event of a crisis.

Risk indicators: interest rate and reputation

Another important element that may be relevant for assessing bond risk is the reputation of the issuer and its affiliates and the financial capacity to provide additional capital in the event of a crisis.

The level of interest offered is also a key indicator of risk - the higher the interest, the higher the risk.

The proliferation of high-yield bonds suggests that cheaper financiers - banks, funds or crowdfunding platforms - have refused to lend because of excessive risk.A proposed interest rate of 15% or similar should be a clear warning. Cases such as Integre Trans or BigBrand have shown that even tempting return offers can result in investor losses.

In any case, bonds are a good and fast-growing financing tool, but like any other investment they come with risks. When deciding whether to invest in bonds, it is useful to rely not only on a colourful prospectus but also on the advice of professionals who understand the nature of these financial instruments. Bonds are not evil, but they are not a deposit either. It is lending, which always involves risk. Therefore, the most important thing is to understand what you are buying.

 

AVOCAD partner, lawyer Laurynas Staniulis