2007 D&O Symposium 2007 D&O Symposium GLOBAL COMPANIES, GLOBAL RISK: GLOBAL COMPANIES, GLOBAL RISK: EXPOSURES ARISING OUTSIDE THE US EXPOSURES ARISING OUTSIDE THE US MODERATOR: NILAM SHARMA - ROBIN SIMON LLP MODERATOR: NILAM SHARMA - ROBIN SIMON LLP RODDY GRAHAM – THOMPSON HEATH & BOND LIMITED RODDY GRAHAM – THOMPSON HEATH & BOND LIMITED KATHLEEN DUBE – ACE INSURANCE EUROPEAN GROUP KATHLEEN DUBE – ACE INSURANCE EUROPEAN GROUP GILLIAN EASTWOOD – FRESHFIELDS BRUCKHAUS DERINGER GILLIAN EASTWOOD – FRESHFIELDS BRUCKHAUS DERINGER DANIEL SOMMERS – COHEN MILSTEIN HAUSFELD & TOLL DANIEL SOMMERS – COHEN MILSTEIN HAUSFELD & TOLL
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GLOBAL COMPANIES, GLOBAL RISK: EXPOSURES ARISING OUTSIDE THE US
GLOBAL COMPANIES, GLOBAL RISK: EXPOSURES ARISING OUTSIDE THE US MODERATOR: NILAM SHARMA - ROBIN SIMON LLP RODDY GRAHAM – THOMPSON HEATH & BOND LIMITED KATHLEEN DUBE – ACE INSURANCE EUROPEAN GROUP GILLIAN EASTWOOD – FRESHFIELDS BRUCKHAUS DERINGER DANIEL SOMMERS – COHEN MILSTEIN HAUSFELD & TOLL. - PowerPoint PPT Presentation
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2007 D&O Symposium2007 D&O Symposium
GLOBAL COMPANIES, GLOBAL RISK: GLOBAL COMPANIES, GLOBAL RISK: EXPOSURES ARISING OUTSIDE THE USEXPOSURES ARISING OUTSIDE THE US
MODERATOR: NILAM SHARMA - ROBIN SIMON LLPMODERATOR: NILAM SHARMA - ROBIN SIMON LLPRODDY GRAHAM – THOMPSON HEATH & BOND LIMITEDRODDY GRAHAM – THOMPSON HEATH & BOND LIMITEDKATHLEEN DUBE – ACE INSURANCE EUROPEAN GROUPKATHLEEN DUBE – ACE INSURANCE EUROPEAN GROUP
• Hong Kong• Iceland• India• Ireland• Israel• Luxembourg• Russia• U.K.
BROKING BROKING CONSIDERATIONSCONSIDERATIONS
• Need for local licensed intermediary?
• What local taxes are payable?
• Who is responsible for paying and filing?
• Most London and Bermuda markets will consider any International D&O risk BUT is the carrier licensed to write local business? (e.g. South America, Japan, China, India etc.)
• Choice of law: local front vs. reinsurance
LOCAL PREMIUM TAXESLOCAL PREMIUM TAXES
Country Premium Tax
Other Tax Paid by? Remitted by?
U.K. 5% Nil Insured Insurer
Australia 3% Stamp Duty
Insurer Broker
Canada 4% Retail Sales Tax
Insurer Insurer
Ireland 2% Stamp Duty Insured Insurer
Bermuda 1% Stamp Duty
Nil Insurer Broker or Insured
Israel 2.5% Nil Insurer Insurer
UNUSUAL COVERAGE UNUSUAL COVERAGE ISSUESISSUES
• Israel: “costs in addition”• France: claims made vs. occurrence (3
or 5 years ERP for nil a.p.)• Germany: supervisory/management
board structure (no Insd. vs. Insd. exclusion)
• EU countries: Tacit renewal clauses Freedom of Services Directive
• Local laws re Directors’ and Officers’ liabilities and local corporate governance requirements
• Local laws affecting availability and enforceability of cover
• Local litigation environment: culture and procedure
• Regulatory requirements – by country and by industry sector
FACTORS VARY FOR EACH FACTORS VARY FOR EACH MEMBER STATE…MEMBER STATE…
France
Italy
RomaniaBul
Greece
Aus Hung
Czech Rep
PolandGermany
United Kingdom
Ireland LithLat.Est.
FinlandSweden
Neth
LuxBel
Slo
Den
Slov
Cyprus
Port. Spai
n
Malta
EUROPEAN LEGAL EUROPEAN LEGAL FRAMEWORKFRAMEWORK
• US has complex legal structure: federal laws and Courts, separate regimes in each of 50 states
• Europe – 27 member states in EU alone Each has own national law and court structure Some have their own state or regional variations Overarching EU law and court structure
• NB fundamental differences in legal systems. Common law system (used in England and US) is in the minority. Most EU countries have a civil law system.
COMMON LAW COMMON LAW VS CIVIL LAWVS CIVIL LAW
• Common Law Strong tradition of doctrine of precedent - Cases
are key source of law Evidence is a critical part of process (e.g. discovery
of documents, factual and expert witness evidence)
• Civil Law Statute is primary source of all law No doctrine of binding precedent (but in practice
judges usually consider decisions of superior courts)
Very limited (and, in some cases, no) focus on discovery or witness evidence
EUROPE vs US – THE EUROPE vs US – THE
PRINCIPAL DIFFERENCESPRINCIPAL DIFFERENCES
• Availability and nature of “Class actions”
• No contingency fees• Loser pays costs• Generally, no juries in civil cases• No punitive damages
IS THIS CHANGING?IS THIS CHANGING?
COLLECTIVE ACTIONSCOLLECTIVE ACTIONS
• European procedures are usually “collective” actions by named individual plaintiffs or consumer associations, rather than actions by generic class.
• Claimants must expressly opt-in, often within a relatively short time period. No US-style “opt-out” system – YET.
• Changes may be on the way: in Italy, France, Ireland
• Broader changes being considered at EU level
FORM OF MULTIPLE CLAIMANT FORM OF MULTIPLE CLAIMANT SYSTEM SYSTEM
ALREADY IN PLACEALREADY IN PLACE
• Sweden
• Spain
• Germany
• UK
• Netherlands
FURTHER FURTHER “AMERICANISATION”?“AMERICANISATION”?
• Fees and funding EU, Italy and Netherlands considering
introduction of contingency fees UK – increasing use of CFAs and non-
traditional funding arrangements.
• Loser pays Some minor modifications being considered
• Punitive damages Italy considering
GLOBAL COMPANIES, GLOBAL GLOBAL COMPANIES, GLOBAL RISK: RISK:
EXPOSURES ARISING OUTSIDE EXPOSURES ARISING OUTSIDE THE USTHE US
Daniel S. Sommers, Esq.Partner
Cohen, Milstein, Hausfeld & Toll, P.L.L.C.
U.S. PLAINTIFFS’ BAR IN U.S. PLAINTIFFS’ BAR IN EUROPEEUROPE
• Opening of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. London Office
• Emerging European Class/Group Action Legislation
• Expansion of Potential Non-Securities Cases in Europe Antitrust/Competition Consumer Civil Rights/Human Rights
• Increasing Awareness of U.S. Remedies for Non-U.S. Investors
NON-U.S. INVESTORS AS LEAD NON-U.S. INVESTORS AS LEAD PLAINTIFFS IN U.S. SECURITIES PLAINTIFFS IN U.S. SECURITIES
CLASS ACTIONSCLASS ACTIONS
Issuer Investor (Country)Able Laboratories, Inc. Deka International (Ireland) Ltd.Adecco, S.A. Union Asset Management Holdings AG (Germany)Ariba, Inc. Aletti Gestielle SGR, S. P. A. (Italy)Biovail Corp. Ontario Teachers Pension Plan (Canada)Cable & Wireless plc Ontario Teachers Pension Plan (Canada)
Examples of U.S. versus Non-Examples of U.S. versus Non-U.S. Shareholder DistributionU.S. Shareholder Distribution
Europe 74%
North America
24%
Asia 2%U.S.19%
Europe81%
Royal Dutch/ShellDeutsche Telekom
GLOBAL COMPANIES, GLOBAL GLOBAL COMPANIES, GLOBAL RISK: RISK:
EXPOSURES ARISING OUTSIDE EXPOSURES ARISING OUTSIDE THE USTHE US
REGULATORY £XPO$UR€A GLOBAL PERSPECTIVE
Nilam Sharma
Robin Simon LLP
London, UK
MISSION STATEMENTSMISSION STATEMENTS
FSA
“The FSA task is to achieve a marketplace that is run in an efficient, orderly and clean manner whilst
ensuring consumers receive a fair deal by being properly informed and appropriately protected”.
SEC
“The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital
formation”.
FSA INVESTIGATIONS
Year of Annual Report Number of New Investigations