Directors and officers

Directors and officers

Directors of UK companies are facing a rapidly increasing exposure to third party claims particularly in the US, where the Sarbanes-Oxley Act is accelerating the frequency of shareholder class actions. While group actions are rarely brought by shareholders in the English courts, directors are still exposed to claims by third parties and the Companies Bill introduces new potential for derivative actions. Broad, sophisticated cover is now available and recent legislation has relaxed restrictions on the indemnification of directors. Although the courts have sought to restrict the circumstances in which a director can be found personally liable, claims are on the increase. We have unrivalled expertise to deal not only with D&O claims but also policy drafting issues having drafted a number of D&O policies currently in use both here and in Spain. We advise routinely on coverage questions.

Early coverage advice is often crucial. The members of the group are experienced in managing the process of clarifying cover whilst handling issues sensitively with insured directors. The rights of all are protected and preserved. On confirmation of insurance cover, the directors concerned can draw upon the broad skills of the group to develop a first class defence.

Some of disputes we have recently been involved in include advising insurers in respect of their exposure to directors’ claims following a major bank fraud in Spain, believed to be the biggest D&O matter to come before a European Court to date, and representing underwriting agents in D&O claims against Shell Oil Directors likely to involve claims of over $1bn arising from the well publicised oil and gas reserves disclosures. We have also advised on jurisdictional issues arising for directors in a multi - £100m loan facilities, and in an FSA investigation of directors of a life company.

Key contacts:

Richard Highley
020 7293 4574
rhighley@dac.co.uk

Kenneth McKenzie
020 7293 4085
kmckenzie@dac.co.uk