Broker Highlights Key Risks Facing Company Directors in 20
The average number of US class actions filed between 2007 and 2009 was
nearly 60 percent higher than in 2006, according to the latest Boardroom
Guide by Willis Group Holdings (NYSE:WSH), the global insurance
broker. This trend is growing internationally as well, with class action
filings against non-US companies making up 14 percent of the total
number of claims in the same period.
The Willis report found that in the US the average number of class
actions was 155 per year from 2007 to 2009, while in 2006 it was 99.
Between 2007 and 2009 there were 465 US and 75 non-US class actions in
total, with the latter averaging 25 per year versus just 12 in 2006.
In this increasingly litigious environment, directors and officers
around the globe run a higher risk of being sued for breach of duties,
Willis said. To help company directors assess the risks facing them, the
second edition of Willis Executive Risks – A Boardroom Guide
addresses key directors’ liability laws in 20 jurisdictions, including
Australia, Brazil, China, Saudi Arabia, the UK and the US.
Each chapter is written by a legal expert in that particular country and
examines significant changes in local regulation and case law which
impact – or look likely to impact – the risk exposures of directors.
In addition to the spread of US litigation trends to other countries,
the Willis Boardroom Guide highlights a move towards collective redress
in Europe with Germany, the Netherlands and Sweden all having developed
some legal mechanisms for taking what are de facto class actions.
Commenting on the increase in Directors and Officers (D&O) risk
exposure, Mark Wakefield, Executive Director of FINEX Global,
Willis’sFinancial, Executive Risk and Professional Liability
business, said, “The financial crisis has resulted in heightened
regulation, leaving directors more exposed than ever to the risk of
being sued for accounting irregularities; issues arising from insolvency
proceedings; and breaches of health and safety legislation,
environmental laws, and competition regulations. The global nature of
the financial crisis brought home the fact that directors cannot afford
to view their exposure from a single jurisdiction. Today more than ever,
they are vulnerable to claims that may be brought in any jurisdiction in
which their business operates.”
Overall, Willis said that the D&O insurance market remains challenging
for financial institutions since they have been the primary focus of
claims arising from the subprime crisis, while in the commercial arena
things are more stable.
Commenting on the report’s findings,Ann Longmore, Executive Vice
President, Willis North America, said,“To effectively compete in
today's international business world, it is critical for companies and
their executives to be informed about the changing rules and exposures
they face in the global playing field. Our latest publication provides
invaluable guidance in this area from top practitioners in each
Willis is the only insurance broker that regularly publishes in-depth
information on directors’ liabilities for its clients. In the latest
instalment of the Boardroom Guide, there are several Special Focus
Chapters addressing specific areas of interest with relevance to claim
trends and corporate governance best practice, including the following:
For a hard copy of the Willis Boardroom Guide, please contact Melanie
Ludlow on email@example.com.
Willis Group Holdings plc is a leading global insurance broker. Through
its subsidiaries, Willis develops and delivers professional insurance,
reinsurance, risk management, financial and human resource consulting
and actuarial services to corporations, public entities and institutions
around the world. Willis has more than 400 offices in nearly 120
countries, with a global team of approximately 17,000 employees serving
clients in virtually every part of the world. Additional information on
Willis may be found at www.willis.com.
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Source: Willis Group Holdings plc