During most of my career working on D&O liability issues, if we were talking about D&O claims, we were talking about developments in the U.S. In recent years, this generalization is increasingly untrue; starting with the global financial crisis now more than a decade ago, investors, regulators, and others throughout the world have sought to hold companies and their directors and officers accountable. The topic of D&O claims is no longer (and has not been for a while) just about the U.S. Indeed, as I have noted elsewhere on this site, the global rise of collective investor actions may be one of the most important stories in the D&O liability arena. With the global rise in directors’ and officers’ liability actions has come a series of questions about the availability of indemnification and insurance for the targeted individuals in their home countries or in the countries where the claims are pending, questions that often may be challenging to try to answer.
One key resource available to try and answer these questions has now been updated. The fourth edition of “Directors’ Liability and Indemnification: A Global Guide” has now been released. This volume, edited by my good friend Edward Smerdon of Coverage Matters LLC, provides a useful and helpful country-specific overview of these issues. Background information about the latest edition of this book, including how to obtain a copy of the new edition, can be found here.
This book aims to provide directors, their companies, their lawyers, and their insurers with an overview of the legal issues that arise in many different jurisdictions. The book also explains the “protection options” available in these jurisdictions through indemnification and insurance.
The latest issue is updated to reflect the changes in the global business and regulatory environment since the book’s last edition was released in 2016. As this edition’s preface notes, “directors are subject to greater scrutiny than ever.” As the preface goes on to note, “Shareholders around the world enjoy more extensive rights to hold directors to account than ever before.” Countries around the world have in recent years adopted a multitude of new corruption and corporate governance laws. In addition, directors’ duties have been codified for the first time in many countries. A number of countries have “beefed up their insolvency laws.” The challenges associated with the pandemic, the War in Ukraine, rising interest rates and economic inflation, have all increased the challenges, burdens, and scrutiny that companies and their directors face.
The book itself addresses the legal environments in 28 different countries – in the U.S., in Europe, in Asia, in Latin America, in the Middle East, and in Africa. This edition adds chapters devoted Guernsey and Jersey, and Sweden for the first time. Each of the chapters is written by local experts located in each of the various countries.
Each chapter provides a country-specific overview of directors’ duties and obligations. The text also describes each country’s claims environment, including the relevant criminal and regulatory liability issues. Each chapter includes an examination of the principles governing the availability of indemnification and insurance in the country under consideration, as well. Among the many useful aspects of this guide, each chapter includes a description of the local rules concerning foreign insurers’ provision of D&O insurance.
Each country is presented succinctly. The format serves to provide an introduction to the critical legal considerations. This volume will be most useful to those looking for a quick impression of the legal environment. For those looking for a deeper understanding, this volume also provides some starting points. Practitioners will find this volume to be a practical, helpful guide in trying to navigate these sometimes difficult issues.
It seems likely that the problems arising from the cross-jurisdictional business activity will only increase. This volume will likely prove a valuable reference for insurance advisors and others called upon to counsel companies in connection with the associated liability exposures and related indemnification and insurance issues. We can only hope that future editions continue to expand the number of countries covered.
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