Cybersecurity Disclosure …………… No, Not Canadian Specific Guidance

November 28, 2011

 

Here is the Cybersecurity disclosure guidance being provided by the Division of Corporate Finance of the Securities and Exchange Commission.

The good part is they don’t require disclosure that could act as a “roadmap” to infiltrate the registrant’s network security. And, in case you didn’t know your loss exposure, they provided a non-exhaustive list including, 1) repair and remediation costs, 2) incentives to repair relationships with customer or other business partners, 3) increased security protection and training, 4) lost revenue directly from downtime, and lost customers/prospects, 5) liability and other litigation costs, 6) reputational damage with customers and investors, and, 7) financial statement hits (warranty liability, product returns, capitalization of software costs, inventory write-downs.)

As for actual disclosure, the guidance points to specific forms (Form 6-K or Form 8-K to disclose the costs and other consequences of material cyber incidents – see Item 5(a) of Form F-3 and Item 11(a) of Form S-3) and they remind registrants of the materiality clauses (Securities Act Rule 408, Exchange Act Rule 12b-20, and Exchange Act Rule 14a-9) and the “substantial likelihood that a reasonable investor (note, not reasonable tech geek) would consider it important in making an investment decision or if the information would significantly alter the total mix of information made available.”

The “materiality” issue is still developing in Canada, and (no surprise) there are conflicting decisions and hotly debated arguments. Here is a recent Ontario Securities Commission case that draws some light on the subject (and here is an older one.)

Issuers do not have present risks “that could apply to any issuer or any offering.”

The key concern is that disclosure decisions must consider “risk” not just loss or actual incidents or threatened attacks. However, as will all disclosure advice, “boilerplate” language will be looked on unfavourably. Registrants need to evaluate their cybersecurity risk considering prior incidents, potential for reoccurrence, experience of competitors and other industry participants, magnitude of potential loss, and adequacy of loss control activities.

A further disclosure requirement is discussion regarding the effectiveness of policies, procedures and controls surrounding cyber incidents and the disclosure process itself.

Cyber Risk is a very new and developing field. Therefore, available guidance is not very specific. This risk will have to be treated like every other business risk. There are good insurance companies and good insurance products available to accept risk transfer of some, but not all, potential cyber losses. But, like every other specialty line of insurance, there is no standard or regulated policy wording or premium calculation. And, to make things more challenging, cybersecurity insurance policies can be of a rare breed of hybrid “first party” and “third party” coverage, with potential for “claims-made” and “occurrence” responses.

Greg Shields is a D&O, Professional Liability, CyberRisk, Employment Practices Liability, Fiduciary Liability, Crime insurance specialist and a Partner at the University and Dundas (Toronto) branch of Mitchell Sandham Insurance Services. He can be reached at gshields@mitchellsandham.com,  416-862-5626, or Skype at risk.first.

CAUTION: This article does not constitute a legal opinion or insurance advice and must not be construed as such. It is important to always consult a registered and truly independent insurance broker and a lawyer who is a member of the Bar or Law Society of the relevant jurisdiction with regard to this material before making any insurance or legal decisions. All material is copyrighted by Mitchell Sandham Inc. and may not be reproduced in any form for commercial purposes without the express written consent of Mitchell Sandham Inc. Anyone seeking to link this document from any external website must receive the consent of Mitchell Sandham Inc. by sending an e-mail to gshields@mitchellsandham.com.


Canadian Class Action Securities Claims: Legal Fees increase in Early Stage of Securities Claim

August 22, 2011

In Pennyfeather v Timminco Limited, here, the court determined that Plaintiff particulars can be compelled prior to the class action certification order, but, in turn, the statement of defence may be required prior to the order as well.

In the Pennyfeather case the plaintiff did not provide particulars, and argued that defendant’s request was premature because they are only necessary in order to plead a defence and this is not required pre-certification. He also argued that this would provide a “tactical manoeuvre for defendants, and would delay the hearing of the leave (to pursue claim under Part XXIII.1 of the Ontario Securities Act – secondary market misrepresentation) and certification motion, causing prejudice to the plaintiff and class members.”

Justice Perell decided that demanding plaintiff particulars, as well as the statement of defence pleadings, be closed “before the action moves to a certification motion” because, 1) the first of the five interdependent class action certification criteria, under s. 5 (1) of the Class Proceedings Act, 1992, is “show a cause of action”, and this would be resolved without the delay of the traditional challenge of the statement of claim, 2) early dismissal of the class would reduce costs, and, 3) it could reduce the common outcome of plaintiff’s request for leave to amend statement of claim.

If other judges apply this logic, early stage legal costs will be more expensive, but the result could be expedited decisions, earlier settlements, earlier dismissals, and shorter term distraction of management, directors and financial analysts.

This is a big case, as it pits Won Kim of Kim Orr against Alan D’Silva of Stikeman Elliott. A number of months ago both individuals were on a panel discussing Bill 198 and Secondary Market Liability and Class Actions Securities Claims, hosted by Chartis. A few of the developments they discussed included, 1) the current Canadian court split decisions on plaintiffs getting access to the defendant’s Directors’ and Officers’ liability policies, 2) the extraordinary costs of e-discovery, and 3) the significant number of Canadian class action securities claims.

The underlying action in Pennyfeather is a $520 million class action, launched in May 2009 against Timminco and certain officers and directors. It alleges that they knowingly mislead investors about growth and profit potential between March and November
2008, specifically regarding its solar-grade silicon. The case was awarded to Kim Orr in late 2009.

The D&O insurance implication are very interesting. The 2009 Management Information Circular suggested their D&O policy had a policy period of May 1 2008 to May 1 2009, with a $40 million limit and $100,000 deductible, as well as a $5 million excess Side A DIC (which commonly is a policy where the limit of liability is dedicated to non-indemnified claims against individual directors and officers,  written on a difference in conditions basis whereby the terms of the policy are broader than the underlying D&O policy.) Some information circulars will mention a split deductible for “securities” claims and for non-securities claims, which would give a good indication that the underlying policy provides considerable extensions to the corporate entity, thereby subjecting the policy to the risk of limit erosion or exhaustion to the detriment of individual Insured Persons. This circular provides no such guidance.

The 2010 circular suggests the same structure was renewed in 2009-2010 with the addition of a new additional excess limit of $5 million Side A DIC available only to independent directors. The premium increase year over year (and then again in 2011) was not extraordinary, which could suggest that the 2008-2009 policy was the one triggered by this claim. Under most common D&O policies that means that this is the only policy that would respond to all future loss “based upon, arising from, or in consequence of the prior noticed claim, including any future claims based on interrelated wrongful acts”.

A common reaction of D&O insurers to a potential limit loss claim is to extend limits of liability with each subsequent renewal and not provide a “refreshed” policy. However, even if insurers do provide a new policy, with new limits, it is rare that those new limits will have any exposure to an existing claim or related downstream claims.

Not knowing the level of “Entity Coverage” in the underlying D&O policy it is difficult to comment on the adequacy of limit in the first triggered policy. But, when the share price is $30 in mid 2008, $3 at the end of 2008, and 30 cents in 2011, and there are 196 million shares issued and outstanding, it would take an army of lawyers to make me comfortable that $45 million is going to carry this litigation over the many years it may have left.

Directors of all public companies should be requesting from their insurance broker commentary on the extent of “limit sharing” in their D&O program. The answer should not stop at Insuring Clause 3 “Entity Coverage for Securities Claims”, but should consider all extensions, endorsements, definitions and exclusion ‘carve-backs.’ Directors should also look at the precedent setting claims and seek outside legal advice on the potential cost to defend these claims and litigate their various motions and counter claims. Then directors should turn their focus internally to determine their unique circumstances to help determine appropriate limits of liability based on their priorities and insurance coverage structure. I have provided a few ideas in an earlier blog post, here.

Be wary of insurers bearing gifts, because a broad policy is not necessarily beneficial to all stakeholders in that policy. Insurers underwrite policies knowing and accepting the possibility of a limit loss. If they are going to suffer a limit loss no matter what the extent of coverage (insuring agreement A, B, C, D or 1,2,3,4) it might just be in their best interest to make the policy extremely broad, extract to most premium they can, and write their cheque very early in the claim process. Payment of the limit usually terminates their involvement in the litigation (except perhaps in Quebec where they will continuously apply to the court to end their ‘defence outside the limit’ costs), and therefore no more distraction or claim management costs, and a big pat on (their own) back for paying a limit loss.

There are many competing and conflicting interests in a D&O policy, and the only way to navigate that potential mine field is to determine coverage priorities before the policy is purchased or renewed. Entity Coverage is an extremely valuable use of premium dollars, but that value might inure only to the shareholders who are suing you.

Greg Shields is a D&O, Professional Liability and Crime insurance specialist and a Partner at the University and Dundas (Toronto) branch of Mitchell Sandham Insurance Services. He can be reached at gshields@mitchellsandham.com,  416 862-5626, or Skype at risk.first. And more details of risk and loss control can be found on the Mitchell Sandham blog at http://mitchellsandham.wordpress.com/

CAUTION: This article does not constitute a legal opinion or insurance advice and must not be construed as such. It is important to always consult a registered and truly independent insurance broker and a lawyer who is a member of the Bar or Law Society of the relevant jurisdiction with regard to this material before making any insurance or legal decisions. All material is copyrighted by Mitchell Sandham Inc. and may not be reproduced in any form for commercial purposes without the express written consent of Mitchell Sandham Inc. Anyone seeking to link this document from any external website must receive the consent of Mitchell Sandham Inc. by sending an e-mail to gshields@mitchellsandham.com.


Long Tail Liability for Canadian Directors and Officers

August 4, 2011

This new case, based on old alleged wrongful acts, hits home because it is a Canadian Company in the insurance industry that is active in the US but not listed on a regulated US exchange. The case involves a July 2011 class action securities suit against Fairfax
Financial Holdings Limited (USA) and its Pink Sheet OTCBB trading, here. The allegations are common “violations of the Securities Act of 1933 and the Securities Exchange Act of 1934” and issuing “materially false and misleading statements regarding the Company’s business practices and financial results.” These allegations surround certain reinsurance contracts and the alleged
concealment of its lack of liquidity. Even the significant alleged financial damage (“a decline in market capitalization of approximately $300 million”), and the lead plaintiff being a pension fund, is not a surprise in the securities class action world. The interesting thing is the class period of May 21, 2003 to March 22, 2006. This is a great example of the very long period that can exist between the alleged “wrongful act” and the ultimate litigation and resulting claim that is noticed to the insurer.

This case is also a great example of systemic risk in the D&O insurance business. The Fairfax case is not unique because “in November 2004 the SEC and Attorney General for the State of New York began inquiries into the use of so-called “finite reinsurance” contracts” and launched a number of investigations against many well-known industry players.

Systemic risk in the long-tail, high-severity products should be a key concern for industry-based insurance programs (reciprocals, risk retention groups, group captives.) These programs may have value as a risk-management, defence management, deductible/retention management, political lobby or loss control tool, but should be used very carefully as a pure risk transfer vehicle.

The risk management spin: the plaintiff lawyer’s website, Robbins Geller Rudman & Dowd LLP, here, provides the complaint, here, which details the alleged “gimmicks” used to “artificially inflate the value of its assets” as well as the “lack of internal controls.” Complaints and legal decisions can present useful information for corporate governance risk identification and loss control activities, and with every public case there comes an increased expectation that other boards and senior management will learn for such cases. Here are a few of the governance issues I took from this case:

  1. Procedures to assess whether finite reinsurance contracts meet the prerequisites for risk transfer,
  2. Product inventory and coverage / risk explanations and evaluations of traditional and non-traditional products,
  3. Use of “reinsurance accounting” or “deposit accounting” and the risk transfer test, and understanding of the local accounting practices,
  4. Evaluation of management assumptions for reporting of profit or loss in foreign private investments,
  5. Evaluation of consolidated financial reporting,
  6. Controls for reporting of intercompany purchases and sales, write-offs, advances and foreign currency accounting, receivables,
  7. Adequate internal controls and (discoverable) communication regarding those controls, including bid/quote tracking, expense guidelines,
  8. Public statement oversight for accuracy of details and forward-looking statements,

The insurance spin: don’t let your insurance broker convince you that the only way to get coverage for a securities claim is to purchase “securities coverage” or the “side C” insuring agreement as part of your directors’ and officers’ liability insurance program. This coverage is very valuable, but that value may favour of the corporate entity. Depending on the structure and fine details of your D&O insurance program, the addition of “securities coverage” could be damaging to individual directors and officers of the organization.

The Towers Watson, 2010 Directors and Officers Liability Survey, here, suggested that 54% of respondents did not conduct any independent review of their D&O liability policy. The survey did not comment on the breadth or value of that independent review done for the other 46%. My question would be if that review included all areas in the policy that presented a risk of limit erosion or limit exhaustion to the detriment of individual directors and officers (not just “insuring clauses” or “definition of insured”, but “severability”, “allocation”, “predetermined defence costs”, “exceptions to exclusions”, “final adjudication in the conduct exclusions”.) My assumed answer “no in 98% of the 46%”, because most insurance brokers will provide a “free audit” of an insurance program, and in most of those cases, you get what you pay for.

The survey also suggests that 60% of participants purchased Side A/B/C coverage, and 14% were not sure how their program was structured. 24% said their coverage was blended with other non-D&O coverage like employment practices and fiduciary liability (but this could also include professional liability, crime, and others, even workers comp.) This blending of “first party” and “third party” claim, “entity” and “individual” coverage, and “claims-made (and reported)” and “occurrence/sustained” triggers can create very significant complications for eventual claim handling.

On the issue of exclusive policy limits for independent/outside directors only 4% said there was some such coverage in place. 80% of public company respondents said they purchased an “Excess Side A” or and “Excess Side A with Difference In Conditions (DIC)” features. Note, Side A is the “non-indemnified” loss insuring agreement for individual insured persons, it is not specific to independent or outside directors.

The Fairfax case could become a very good example for insurance company risk management, as the case may be part D&O, party Entity Coverage for Securities Claims, part Insurance Company Errors and Omissions (professional liability), and part Outside Directorship Liability insurance. The insurance risk is that the defence costs, judgments and/or settlement loss may be only partially or not at all covered by any of these policies. But the reality is that though the class action securities litigation risk may be very public, the resulting insurance risk will not likely see the light of day. The lack of publicity of insurance risk means the learning opportunity and loss control lessons are much more difficult to find.

If you would like to learn more about insurance risk, securities class action risk, D&O/E&O/Fidelity insurance or loss control for publicly traded companies or insurance companies; or if you would like to have an in-depth review of your insurance program,
please contact me directly.

Greg Shields is a D&O, Professional Liability and Crime insurance specialist and a Partner at the University and Dundas (Toronto) branch of Mitchell Sandham Insurance Services. He can be reached at gshields@mitchellsandham.com,  416 862-5626, or Skype at risk.first. And more details of risk and loss control can be found on the Mitchell Sandham blog at http://mitchellsandham.wordpress.com/

CAUTION: This article does not constitute a legal opinion or insurance advice and must not be construed as such. It is important to always consult a registered and truly independent insurance broker and a lawyer who is a member of the Bar or Law Society of the relevant jurisdiction with regard to this material before making any insurance or legal decisions. All material is copyrighted by Mitchell Sandham Inc. and may not be reproduced in any form for commercial purposes without the express written consent of Mitchell Sandham Inc. Anyone seeking to link this document from any external website must receive the consent of Mitchell Sandham Inc. by sending an e-mail to gshields@mitchellsandham.com.


Mitchell Sandham Featured in Canadian Insurance Top Broker Magazine!

July 8, 2011

 

Mitchell Sandham is excited to have an article featured in Canadian Insurance Top Broker Magazine, called “D&O and E&O: How much is enough?” by Greg Shields.  Please click here to access the article.   

 


Franchisor – Franchisee Risk in Canada

May 27, 2011

I have heard many people complain about Tim Hortons donuts being smaller than the competition, and that “always fresh” donuts (actually it is doughnuts) actually means “recently frozen”, but most of us wish we owned THI shares (trading at a 53 wk HI with a 36% increase over this time last year and a 55% increase over two years.)

However, there is a group who is not very happy about it. A (small) group of franchisees filed a $1.95 billion class-action lawsuit against Tim Hortons claiming breach of contract, breach of duty of fair dealing, negligent misrepresentation, and unjust enrichment stemming from Hortons’ conversion to frozen donuts. As with many franchisee claims, they seem to have a problem with inflated prices within the mandatory supply agreements. MACLEANS.ca released an article, here, in September last year, on the suit and the connections within the class action claim. They followed-up with a second article, here, a few weeks ago because the corporation provided a breakdown of average store profits. Please note this action has not been certified and the court has not ruled on the defendants’ motion for summary judgment.

It will be interesting to see if the court takes one look at the growth in per store profit since the introduction of the frozen product strategy and class action claim. But, the most important thing about this action is the risks it identifies for other franchisor entities. Outside of the almost $2 billion demand, the legal costs, distraction of management, franchisee infighting and the extraordinary reputational damage, actual loss will be difficult to measure. In the Tim Hortons case, a separate group of franchisees incurred considerable legal costs in an attempt to seek intervenor status, here, in the class action so they could argue against the certification of the action and protect private information and their corporate brand. Their motion was denied.

Franchisee – Franchisor risks are different from non-franchise operations, because franchise companies have the same exposures to property loss, general liability lawsuits, management liability, shareholder lawsuits, and employment practices and crime risk as any other operation, but they have a unique supportive / hostile relationship with their key business partner. The business model can be extraordinarily successful, and Tim Hortons is a textbook example, growing from one Canadian coffee shop in 1964 to 3,000 Canadian and 600 US stores today. But success can bread contempt and recent or ongoing franchise cases include the likes of Tim Hortons, Midas Inc., Quiznos, General Motors and Shoppers Drug Mart (see Financial Post, here.)

Managing franchise risks may come down to communication.

Risk management by contract language can be a mine field. Simple contract language may not provide the protection that many franchisors expect because language prohibiting class actions is common but the courts are still certifying national class actions. I do not suggest removing the language, just do not rely on it as your only form of risk management.

Another form of risk management could come from pre-screening potential franchisees. Myers Briggs and other personality tests are very common for large organizations, but there are now test specifically designed to measure future success of potential franchisees (here.) Individual franchisees may be more interested in starting a claim or participating in a class action if their individual franchise is not as successfully as other operations. It is easier to accuse the franchisor of collusion or negligence than it is to recognize that they are not cut-out to be a franchise owner.

Franchisor liability insurance is available in the insurance marketplace in Canada. It can respond to claims made by franchisees alleging breach of contract, breach of duty of fair dealing, negligent misrepresentation, and unjust enrichment. Limits of liability can be available from $1 million to $25 million or more, but large limits may become prohibitively expensive. The value of this insurance is not only in its response to defence costs, settlements or court awards, but also the support in the claim. One major issue for franchisors, is that they may not have the time and experience needed to find the best, non-conflicted, and most experience counsel available for their case. The lawyers who helped draft contract language may not have litigation defence experience, or may be conflicted out of handling your defence if their contract language has any connection to the underlying allegations. The insurance can also have a calming effect on public reaction to news of a lawsuit, because stakeholders are comforted to know that there will be at least some insurance in place to cover losses.  Finally, the value of any franchise is the ongoing relationship between franchisee and franchisor. A third party insurer being inserted into a dispute between franchisee and franchisor can help maintain the long-term relationships between the parties.

A few words of caution regarding insurance coverage: 1) a D&O policy is not designed to coverage the vast majority of total loss from a franchisee vs franchisor lawsuit, 2) you should determine the appropriate insurance broker based on experience, independence and effort, but only let one broker approach and negotiate with potential insurers, 3) don’t make assumptions about what the policies cover, ask questions and discuss claim scenarios and policy exclusions with your broker.

If you would like more information on franchise liability insurance please don’t hesitate to contact me directly, Greg Shields, Partner, Mitchell Sandham Insurance Services, gshields@mitchellsandham.com, or at 416 862-5626.

CAUTION: This is not an exhaustive list of definitions, duties, liabilities, limitations, defences, or suggested actions. The information contained in the Mitchell Sandham website or blog does not constitute a legal opinion or insurance advice and must not be construed as such. It is important to always consult a registered insurance broker and a lawyer who is a member of the Bar or Law Society of the relevant jurisdiction with regard to this material before making any insurance or legal decisions. All material is copyrighted by Mitchell Sandham Inc. and may not be reproduced in any form for commercial purposes without the express written consent of Mitchell Sandham Inc. Anyone seeking to link this site from any external website must receive the consent of Mitchell Sandham Inc. by sending an e-mail to gshields@mitchellsandham.com


Funding Plaintiff Securities Class Actions in Canada

April 20, 2011

The race to US style litigation just went from go-cart speeds to F1.

Prompted by contingency fees, promoted by the plaintiff bar, a little nitrous oxide boost by Bill 198 and recent class action certification decisions, and now we are rounding the corner to see the checkered flag.

In Dugal v. Manulife Financial Corp, here, a funding agreement has been (conditionally) approved by Justice Strathy of the Ontario Superior Court. The interesting thing is the entity funding a portion of plaintiff costs is an unrelated third party Irish corporation that is advancing up to $50,000 for plaintiff disbursements and “will indemnify the plaintiffs against their exposure to the defendants’ costs, in return for a seven percent (7%) share of the proceeds of any recovery in the litigation”

Perhaps the people behind this are investors and players recently forced out of the online poker business, here, and are looking for their next big gamble.

But this is an underwriteable gamble, so I guess we can be expecting ‘prospectus’ type documents on prospective plaintiff securities class actions. Actually, this not too far fetched. I remember receiving an insurance submission, back in the 90’s, for D&O coverage for a new entity that was proposing a public offering of common shares where the proceeds would be used to fund plaintiff class action suits. This entity did not end up pursing the offering (or even the business plan) that I know of, and I have no knowledge of any similar public or private entities in Canada. It is well known that US plaintiff counsel with shop their potential claims to other plaintiff law firms and ‘syndicate’ the deal, but I don’t know if that deal sharing exists among Canadian law firms. Justice Strathy’s decision (par. 29) says “indemnities given by class counsel are commonplace” and provides two Supreme Court decisions. But, lawyers tend to be fairly conservative so they are likely much more selective than private litigation funding entities. Also, indemnities from plaintiff class counsel may jeopardize their independence.

Class action funding by private ventures could be profitable, because the main competitor is the Law Society Amendment Act’s Class Proceedings Fund. As per par 31 of the decision, “The Fund was established by the Law Society Amendment Act (Class Proceedings Funding), 1992, S.O. 1992, c. 7. The Fund was given initial seed money in the form of a $500,000 grant from the Law Foundation of Ontario. The CPC receives a levy in the amount of 10% on any awards or settlements in funded proceedings, together with repayment of any funded disbursements. Its annual report indicates that from its inception to June 2010 it had awarded funding to class proceedings in the amount of $6.8 million, it had paid costs awards in favour of defendants in the amount of $1.9 million and it had received $18.6 million in revenues from its entitlement to 10% of settlements or judgments. At June 30, 2010 its account stood at a balance of $11.3 million. From 1992 until June 30, 2010 the CPC received 96 applications for funding. Of those applications, 52 had been approved for funding, 28 had been denied or deferred and 16 had been withdrawn or are currently in abeyance.”

The corporate Defendant is obviously very well connected in Canada, but the court decision suggests that none of the 25 largest pension fund/investment fund investors in Canada, nor any of the individual investors notified of the proposed funding agreement, came to the defence of the Defendant or objected to the funding agreement. This is a big surprise to me because the concept of outside funding of class action claims is still relatively new to Canada, and this court decision sets a very significant precedent. Class action securities claims are a balancing act for investors because, on one hand, they (at least the small individual retail investor) need class support for any realistic opportunity to seek damages, but, on the other hand, the publicity of a class action securities litigation can cause a significant stock price drop to their underlying investment and create a major distraction for directors, officers (their D&O insurers), management, employees, customers and analysts of their portfolio companies. I also thought that institutional investors would oppose anything that supports class action securities claims, because they have the means to pursue individual securities claim and don’t need to rely on class proceedings. But, since a large local pension plan is a lead plaintiff in this action, and no other fund manager objected to proceedings, my assumptions must be wrong. 

The  underlying allegations (see the decision on the application to amend the statement of claim, here, under “The Nature of the Action” 6-10, and here) include : “misrepresentations concerning the defendant’s risk management practices in its public disclosure documents”, “artificially inflating the values of its stock.”  The alleged culprits were the seg funds and variable annuities, which the plaintiff alleges were not sufficiently hedged against financial meltdown of the fourth quarter of 2008 despite claims of rigorous enterprise-wide risk management systems, and therefore caused a $5 billion increase in reserves for future payments and a significant stock drop in the defendant’s shares.

There were a bunch of other allegations, and the plaintiff named individual directors and officers as defendants, but this blog post is about the funding, not the “tapping of D&O insurance limits”, (which I will be sure to blog about if the action is certified as a class proceeding in September.)

The proposed class – all purchasers of the defendant’s securities between January 26, 2004 and February 12, 2009.

The alleged damages – $2,500,000,000.

The best case scenario payday for the Irish plaintiff securities class action funder – $10,000,000. Yes the agreement is for 7% of the proceeds of any recovery (settlement or judgement less costs and expences), but the agreement capped it at $5 million if resolution is reached prior to pre-trial conference brief, and $10 million after that. Too bad for the Irish funder, because it could have been worth $187,500,000.

The risk to the funder, $50,000 towards the plaintiffs’ disbursements and the funder “will pay any adverse costs award made against the plaintiffs.” If this leaves you scratching your head, me to. If the Plaintiff loses and the Defendant is awarded costs (Loser Pays), the funder could be out millions, but their reward is only millions. Not a great return when there is little precedent in Canada regarding the outcome of actions brought under Bill 198 (Section 130 and 138 of the Securities Act – relatively new legislation regarding a cause of action for misrepresentation in the secondary market – as opposed to the former legislation requiring the misrepresentation be in the IPO prospectus document (not the secondary market documents) and only where the plaintiff can prove reliance.)  And, as I read the March 21, 2011 decision from Justice Strathy denying an important part of the Plaintiff’s Amended Pleading, it seems like a good chunk was taken out of their case. The decision suggests the original action only “sought leave to asset the cause of action for secondary market misrepresentation set out in s. 138.3 of the Securities Act”, but “there was no specific pleading of s. 130” and no mention the word “prospectus.” When the Plaintiff moved to amend the statement of claim and assert a cause of action for misrepresentation in ten prospectuses filed by the defendant, Justice Strathy agreed with the Defendant and denied that portion of the amendment based on missing the 180 limitation period under s. 130. They issues raised in determining the denial included, 1) the Plaintiff was sophisticated, 2) they had very experienced securities lawyers, 3) Feb 12, 2009 was the first major write-down announced by the Defendant, and that would be the date they should have known about all potential damages, 4) the original statement of claim was issued July 29, 2009 (167 days), 5) amended statement of claim was November 17, 2009 (278 days), but no mention of s. 130 or prospectuses, 6) motion for certification and for leave under 138.8(1) was on May 18, 2010 (460 days), and this included amendments “which contained, for the first time, specific allegation of prospectus misrepresentation under s 130 of the Securities Act”, 7)  s 130 and prospectus misrepresentation could not be inferred from the original statement of claim, and, 8) the extension of limitation allowed in McCann v. CP Ships “was decided more than a year before this action was commenced”  and involved the same counsel and therefore “it is inconceivable that counsel would have asserted a s. 130 claim without specifically pleading the section or referring to the prospectus containing the alleged misrepresentation.”

With the decision on the first amended statement of claim, released January 19, going in favour of the Plaintiff, and the limitation period and funding agreement decisions not released until March 21, 2011, it will be interesting to see what direction this case takes. If the limitation period decision is in fact bad for the case, the funding company would simply have to reject the court’s requirements, and walk away.

I wonder if third party litigation funding will actually reduce the contingency fees paid to plaintiff counsel, because they were not taking any risk of indemnifying their clients. This answer will come over time, as there are still many securities class action claims in the pipeline and certainly more to surface.

If you would like to “stress-test” your Directors’ and Officers’ liability policy (D&O) against this type of potential claim, or if you would like an independent third party review of your insurance policy, please don’t hesitate (I really mean, don’t hesitate, because policy negotiation can quickly become impossible if a potential claim surfaces against you or your entity) to contact me directly. Greg Shields, Partner, Mitchell Sandham Insurance Services, gshields@mitchellsandham.com, or at 416 862-5626.

CAUTION: The information contained in the Mitchell Sandham website or blog does not constitute a legal opinion or insurance advice and must not be construed as such. It is important to always consult a registered insurance broker and a lawyer who is a member of the Bar or Law Society of the relevant jurisdiction with regard to this material before making any insurance or legal decisions. All material is copyrighted by Mitchell Sandham Inc. and may not be reproduced in any form for commercial purposes without the express written consent of Mitchell Sandham Inc. Anyone seeking to link this site from any external website must receive the consent of Mitchell Sandham Inc. by sending an e-mail to gshields@mitchellsandham.com.


Canadian Class Action Securities Claims

April 14, 2011

This may surprise a lot of Canadian directors and officers. NERA Economic Consulting recent published its “Trends in Canadian Securities Class Action: 2010 Update”, here, co-authored by Mark L. Berenblut, Bradley A. Heys, and Tara K. Singh. They suggest there are 28 active lawsuits, alleging almost $16 billion in damages. Eight new filings in 2010 was one less than 2009 and two less that 2008. The study notes that five cases were settled in 2010 at average and media settlement amounts of $13.5 million and $10 million, respectively, with total settlement by defendants of almost $68 million. The majority of these cases were brought under the secondary market liability legislation, Bill 198.

The study also raises the important issues of claims brought against Canadian domiciled companies in the US. They noted 13 such filing, but, surprisingly, only 3 of these have parallel actions in Canada.   

The Canadian D&O insurance landscape will obviously be affected by these cases. The numbers may pale in comparison to the US, but our spread of risk and total incoming D&O premium is also much smaller than the US. My very rough guess on total D&O insurance premium generated in Canada in 2010 is $250 million. This is not just publicly traded D&O premium, but all public, private, pseudo Government and non-profit D&O premium. If five settlements, based on relatively new and untested law, can take this big a chunk of the premium, and the vast majority are still pending, then D&O premiums will be going up. Remember, after distribution costs (our commissions), claims costs, underwriting expenses, reinsurance, corporate overhead, etc. etc., the combined loss and expense ratio starts going up quickly. Then you have to think about the lawsuits that do not fit into that very specific category of “certified securities class actions.” These are derivative claims, employment and pension/fiduciary suits (remember, D&O policies are often, and unfortunately, extended to Employment Practices Liability and fiduciary liability risk), competitor actions, regulator investigations, client claims, etc.

But all this fear mongering aside, the sky is not falling. The are many competitors in the Canadian D&O marketplace (27 last time I looked, but far fewer for Public Listing Exposure), and renewal premiums seem to be flat in many industries and even falling in the small private and non-profit space. The key will be to watch for capacity leaving the Canadian D&O marketplace. We had one Managing General Agent (not a standalone, Canadian capitalized insurance company, but an entity underwriting on behalf of Canadian insurance or reinsurance companies or Lloyd’s of London Syndicates) closed its D&O doors last week; but, since its renewal rights were purchased by a relatively new player in this line of business in Canada, it does not suggest that capacity is being squeezed.

And the great thing about public cases, you can read about the alleged wrongful acts and strengthen your loss control tools to mitigate risk.

One of the ways to mitigate risk is to purchase a GOOD, I repeat, GOOD, D&O insurance policy. Broad is not always better. For example, extending the D&O policy to cover loss of the corporate entity can be classified as broad, and even good, but that does not mean it will serve the best interests of the individual, independent directors, non-independent directors, or the corporate officers. Management needs to engage the services of an experienced, truly independent, insurance broker who is dedicated to the client and to the insurance products. They need to discuss and investigate the broker’s potential conflicts of interest, and be satisfied that the individual (not just the firm) who is responsible for knowing the insured, and its operations, is also the person negotiating and servicing the coverage.

Far too many Canadian insurance brokers are willing to call themselves independent, even when they are owned by an insurance company or insurance related financial conglomerate.

A D&O policy is not good unless the priorities of each of the Insureds have been identified and applied to the coverage purchased.

If you would like more information on Directors’ and Officers’ Liability Insurance, or Canadian D&O litigation, please contact me, Greg Shields, Partner, Mitchell Sandham Insurance Service, gshields@mitchellsandham.com, or at 416 862-5626.

CAUTION: The information contained in the Mitchell Sandham website or blog does not constitute a legal opinion or insurance advice and must not be construed as such. It is important to always consult a registered and truly independent insurance broker and a lawyer who is a member of the Bar or Law Society of the relevant jurisdiction with regard to this material before making any insurance or legal decisions. All material is copyrighted by Mitchell Sandham Inc. and may not be reproduced in any form for commercial purposes without the express written consent of Mitchell Sandham Inc. Anyone seeking to link this site from any external website must receive the consent of Mitchell Sandham Inc. by sending an e-mail to gshields@mitchellsandham.com.


Skip Arbitration, Go Straight to Class Action

April 12, 2011

The Supreme Court of Canada has released a new decision in Seidel v. TELUS Communications, here, that will be followed closely by Canadian class action plaintiff lawyers. If you don’t want to read the whole case, Osler has released a paper, here, by Jennifer Dolman and Matthew Thompson, discussing the decision, some of the SCC precedent cases like Dell v Union des consommateurs, here, and Rogers v Muroff, here, the conflicting precedent, the narrow 5-4 decision and dissenting opinion with the court,  and the impact. The most interesting quote from this article “be prepared for an increased number of claims proceeding to the court system.” Interestingly, this paper makes a specific reference to franchisors and generous interpretation of the Arthur Wishart (Franchise Disclosure) Act, 2000 favouring franchisees.

This Supreme Court decision will put smiles on the faces of plaintiff and defence lawyers, but it will also help identify existing and new risks that must be managed by corporations, their management, directors, shareholders, and their insurers. 

If you still don’t want to read the case or paper, here is my short summary:

Plaintiff (P) entered into a consumer contract for cellular service and later alleged false representation in how the defendant (D) calculated air time for billing. The contract included “private and confidential” mediation and arbitration and waiver of right to commence or participate in a class action. P sought certification of a class action; D was denied its application for a stay on proceedings by the trial judge but Court of Appeal stayed P’s action and sent the case to arbitration. P appealed and The Supreme Court of Canada (SCC) lifted the stay of the class action but only in relation to claims regarding Section 172 of the Business Practices and Consumer Protection Act, S.B.C. 2004, c. 2 (the BPCPA), saying this legislation “should be interpreted generously in favour of consumers”, supporting a “public interest plaintiff” and encouraging “private enforcement in the public interest” through a “well-publicized court action to promote adherence to consumer standards.”

The conflict seems obvious. The SCC suggested they did not negate their decisions in Dell, Rogers and others, which supported arbitration as a means to avoid lawsuits. In par 41 of the decision they explain by suggesting “the outcome turned on the terms of the Quebec legislation” and “contained no provision similar to s. 172 of the BPCPA.”

This court was specifically looking for “public denunciation” and notoriety that could not have been achieved through private and confidential arbitration.

The risk management spin:

If you have used or expect to use arbitration clauses to quash any rebellion by clients, you better hope you are not subject to any legislation where indirect statutory interpretation could suggest that such legislation was “enacted to encourage private enforcement in the public interest” and intended to “shine a spotlight on allegations of shabby corporate conduct.”

Good luck avoiding such legislation, because this case dealt  directly with section 172 of the BPCPA, but cited cases reference the Copyright Act, the Labour Code, the Insurance Act, and others.

Continue to use the arbitration and mediation provisions (as well as “hold-harmless” and “limitation of liability” clauses) in your customer agreements, but also invest in a corporate communication system (CRM) that will help identify and classify customer claims on a real time basis. Also create policies and procedures to deal with individual consumers before they become sufficiently upset to take their complaints to the social networks. Today, versus even two years ago, consumers have exponentially greater ability to reach similarly-minded individuals, and class-action remedy is far more popular. Data-mining in twitter, facebook, myspace, and the broader blog-world is a reality, so use it to your advantage, because it is impossible to determine which complaints will go viral, and no containment strategy can move as fast as a viral complaint.

As for insurance, don’t rely on anything you currently have, unless you have recently “stress-tested” your program for this exact risk exposure.

If the consumer lawsuit names individual directors and officers, the D&O policy might respond to the defence costs of the individuals, excess of the corporate retention (if the corporation is financially and legally able to indemnify the individuals.) But it won’t likely respond to the costs of the corporate entity because a consumer complaint would not be classified as a “securities claim”, which is where most “entity coverage” under a D&O policy can be found. Some private company management liability policies provide entity coverage that is not limited to a securities claim, but the exclusions (which are also hidden in the definition of Loss) typically exclude “fines or penalties”, costs of remedial relief, or any circumstance or situation existing prior to the inception of the policy, and many others.

If a lawsuit of this nature actually gets through the definitions and exclusions in the policy, most D&O and Management Liability policies require that an individual director or officer be continuously named in the case in order for the policy to respond. And the double edge sword to this case is that if the lawsuit is covered by the policy, there is only one policy limit of liability, and exhaustion of that limit based on loss of the corporation entity, could ultimately be to the detriment of individual directors and officers for their downstream personal liability.

The Commercial General Liability policy would not typically respond to claims brought with regards to consumer protection from a consumer contract or agreement because there is no underlying “bodily injury” or “property damage” to trigger the policy.

A Professional Liability policy (aka Errors and Omissions (E&O)) might respond, but there is no standard or regulated wording in this product, so the policy will have to be examined closely. Also, E&O is more commonly purchased in the commercial products industry (where arbitration provisions are more likely to survive), and less often purchased in the retail consumer products industry.

There comments are not meant as fear-mongering. The reality is that the SCC did not allow all of the P’s allegations to go through to private litigation, and the decision is not a certification of a class proceeding. However, whenever a SCC decision goes in favour of an individual P seeking class action status and remedy that includes disgorging of profits, it presents financial and reputational risk exposures that cannot be ignored by any company of any size.

Greg Shields, Partner, Mitchell Sandham Insurance Brokers, 416 862-5626, gshields@mitchellsandham.com  

CAUTION: The information contained in the Mitchell Sandham website or blog does not constitute a legal opinion or insurance advice and must not be construed as such. It is important to always consult a registered insurance broker and a lawyer who is a member of the Bar or Law Society of the relevant jurisdiction with regard to this material before making and insurance or legal decision. All material is copyrighted by Mitchell Sandham Inc. and may not be reproduced in any form for commercial purposes without the express written consent of Mitchell Sandham Inc. Anyone seeking to link this site from any external website must seek the consent of Mitchell Sandham Inc. by sending an e-mail to gshields@mitchellsandham.com.


Directors’ Liability

March 10, 2011

Greg Shields was happy to respond to the request for a second article by the Canadian Society of Physician Executives (CSPE) Newsletter (www.cspexecs.com). With their permission we have re-published it here.

Directors’ Liability
By Greg Shields

All good things come with risk and reward. Company director is a vital role. Our organizations, whether they are large or small, public, private or non-profit, require strong, educated and dedicated people in a governance capacity to be successful. However, it is easy to find somebody who will tell you that you would be crazy to take on a director position, especially of a public company, and sometimes that is the only excuse we need to say no. But you would be missing out on a great opportunity. These roles allow you to make a real difference in the community. Your experience, education and leadership will allow for better decisions by management and help create a growing and successful operation. A strong and active board will help identify and attract quality management, will help raise funds (donations or capital), and protect investors, employees and clients from negligence and fraud. A broadened network, introductions to people you would never otherwise have the opportunity to meet and the challenge of developing new skills and abilities are some of the material benefits from taking on a directorship function.

There are also real risks that should not be ignored. Over 150 pieces of legislation have to do with some aspect of risk of personal liability for an individual director. The most obvious is unremitted source deductions if the corporation goes bankrupt. The Canada Revenue Agency is not afraid to pursue these claims, which include income taxes, Canada Pension Plan contributions and employment insurance premiums. There is also potential recourse against directors for sales tax, severance pay, vacation pay, workplace liabilities, and environmental liabilities. In addition, there is a civil liability a shareholders, employees, clients, creditors, competitors and other stakeholders in the organization.

 While considering these sources of risk, it is important to remember that meaningful protection is built into our laws. The due diligence defence is the strongest of these. Arguments demonstrating that specific actions were taken to attempt to prevent loss will almost always prove successful. The courts will consider the knowledge and education of the individual directors and look at their actions to determine if they acted in good faith and in the best interest of the organization, thereby fulfilling their duties of care, loyalty and obedience.

This may be obvious from some of the very public directors’ liability cases, but, the courts have not set a very high bar for directors. Acting in a manner that is free of conflict of interest and self dealing; gaining an understanding of withholding and remittance requirements to a level of a reasonably “like” person (if you are not a chartered accountant, you will not be required to have the knowledge and experience of one); establishing some policies for reducing unremitted source deductions and other liabilities; and relying on management and independent experts for advice will go a very long way toward mitigating director risk.

I also recommend the use of personal contractual indemnity agreements for all directors of organizations that have the financial ability to indemnify its directors. Indemnification provisions are built into the Canadian Business Corporations Act, Ontario’s Business Corporations Act, many corporate by-laws and most of industry specific acts, but, these are not all created equal and none of them is as good as a well vetted individual contractual indemnity.

Another risk mitigation tool is Directors’ and Officers’(D&O) Liability insurance. This insurance coverage is demanded by directors of most non-profit and publicly traded entities and is gaining popularity with private companies.  This insurance is not a panacea of coverage. It should not be a priority over good general liability, property or operation-specific products, such as professional liability (includes medical malpractice), errors and omissions liability (E&O), environmental, fidelity/crime, and cyber/media/privacy insurance policies.  And D&O is not a priority over good governance, risk management and compliance (GRC) activities.

But, when these other issue have been considered, and some investigation and action taken, the D&O purchase should not be taken lightly. Far too often this insurance is sold, not purchased. Somebody says they want it, and then it is left up the insurance broker to decide what is best. The outcome of this method is “insurance risk” that has not been identified or managed. Insurance risk is the failure of the policy to act as anticipated.

A decision to purchase D&O insurance should be based on the limit liability, not on the insurance premium. The limit of liability has, or should have, a value that is material to the corporation, whereas the premium often does not. Even for a small non-profit, this is a $1-2 million dollar decision. For a small publicly traded company it is a $5-15 million dollar decision. For a large public company the range is $25-100 million. The purchase decision deserves this level of attention.

Second, the purchaser should contemplate and prioritize the separate interest of all potentially insured parties under the policy. Special attention must be paid to the personal liability of the individual directors and officers. Most directors and officers make the critical assumption that their D&O policy is designed to cover their personal liability. For many, and perhaps even most, directors in Canada, that assumption is incorrect. Through aggressive competition among insurance companies and under-educated, over zealous insurance brokers, policies have been “broadened” to such an extent that they may now be a detriment to individual directors. Claims made against the corporate entity and coverage for non-traditional parties and matters are now fair game under many D&O policies. This level of coverage can be very attractive to aggressive plaintiffs and their even more aggressive lawyers, because a broader policy means a better chance for at least a modest settlement, which reduces the risk of pursuing  a long-shot chance of discovering the smoking gun that will produce the a settlement made up of the entire policy limits, plus corporate contribution, plus third party contribution, plus individual director or officer contribution.  However, there is only one limit of liability that is shared by all parties for all claims; thus, a loss by the corporate entity or other party can erode or even fully exhaust the limits otherwise available  to the individual directors.

Third, it should be fully understood that there is no regulation of (specialty lines) policy wordings in Canada. Dozens of insurance companies, managing general agents, captives and reciprocals provide D&O insurance coverage and there are hundreds of versions of policy wording, endorsements and applications, any part of which can determine the difference between coverage and denial. There are also many brokers who are willing to pass themselves off as independent experienced brokers, when in fact they limited or no direct experience with D&O policies and claims, and when they owned by, or have a material debt or non-standard remuneration agreement with, an insurance company. Therefore, the decision purchase D&O insurance should include, 1) a direct request of all brokers to disclose all potential conflicts of interest, including any “exclusive insurer” programs, 2) direct questions of all brokers to explain to your satisfaction the key issues regarding all coverage options as they relate to your operations, and, 3) a direct request of all brokers to not approach any insurance markets on your behalf until you have made your choice of broker.

With the inherent protection built into statute and legal precedent, an ounce or two of loss prevention, a solid individual contractual indemnity and a well-negotiated D&O policy, the benefits of a board position will far outweigh the risks. And your industry and the Canadian business community will be much better served by the involvement of independent, dedicated and experienced corporate directors.

Greg Shields is a Partner with Mitchell Sandham Insurance brokers, an independent company providing commercial, private client and financial services insurance. He specializes in casualty products that address directors’ and officers’ risk, crime, fiduciary liability, professional errors and omissions and cyber / media risk. He provides insurance negotiation and risk consulting services, coverage and claims advice to small and medium-sized enterprises, multi-nationals and nongovernmental organizations. Greg can be reached at 416 862-5626 or gshields@mitchellsandham.com .


Canadian Directors’ and Officers’ Liability Insurance (D&O) and the Recent IMAX Decision

February 22, 2011

Canada is seeing a material change in home-grown D&O loss experience. On Valentines day we saw a new decision in the first case to be brought under Ontario’s new, at the time, “Bill 198”, aka, part XXIII.1 of the Ontario Securities Act (the “Act”), section 138.3, which provides a statutory cause of action for secondary market misrepresentation. In the IMAX case, the underlying securities litigation commenced September 20, 2006, when Siskinds LLP, here, and Stutts, Strosberg LLP, here, brought their case alleging misrepresentation and breach of duty of care. Justice K. van Rensburg, in her decision, here, certify class proceedings. The defendants appealed this decision,  here, and on Feb. 14, 2010, Justice D.L. Corbett denied the defendants motion for leave to appeal.

We all know what happens to settlement amounts when a court decision goes in favour of the plaintiff class, but here we can consider what could be material to directors and officers in Canada. The IMAX 2005 information circular listed a D&O policy with a $70 million limit of liability. Though the circular does not provide a lot of detail, it does say they had a split deductible of $100,000 “for each claim under the policy other than claims made under U.S. securities law as to which a deductible of $500,000 applies”, and paid an annual premium of $962,240. This split deductible suggests at least some portion of that tower of D&O coverage was extended to cover the corporate entity for some of its individual loss and expenses.

There is a lot of litigation left in this case, but a full limit loss should not come as a surprise to anyone. Outside of the magnitude of an insured loss on this size of D&O coverage in Canada, the materiality of the case will depend on potential for loss above the limit. More importantly, loss above the limit if any part of it is borne by the individual directors and officers.

In 2005-2006, and even today, Excess Side A DIC (Side A = loss not indemnified by the corporate entity, DIC = difference in conditions, or an excess policy written to be broader than the underlying policy) was not a guaranteed purchase for public corporations of this size in Canada. Therefore, if the (assumed)  A, B, C primary policy extended through the entire limits of the tower, then the comfort level of the individual directors would be largely based on the size of the limit of liability. (In case it needs explaining, A is the insuring agreement in the D&O policy that responds to loss not indemnified by the corporation; B is the insuring agreement that protects the corporate entity for loss it incurs on behalf of the individual directors and officers; C is the insurance agreement that protects the corporate entity for its own loss and expenses in certain claims, like securities claims. But, this is just a glancing overview because an appropriate explanation requires discussion on “presumptive indemnification”, “hidden entity coverage” and many other D&O coverage issues.)

 Now we can start to see the very reasonable misconception in the D&O policy. It is marketed as a D&O policy, when, much to the surprise of individual directors, it is in fact a corporate entity policy.

The problem (for individual directors): $70 million may seem like a large limit, and may have looked good on a benchmarking chart, but there  was, and is, no legal precedent of insurability of a Bill 198 claim in Canada. From the little I know of Strosberg, here, and Lascaris, here, I will be shocked if they settle this case at policy limits. As far as I know there is no institutional plaintiff, but, the entire class pool has yet to be identified, and I imagine Silver and Cohen would be willing to bough-out in favour of a large pension plan, if that is what is necessary to fund a “scienter” position and a removal of the liability cap. Though there are only a few cases of personal (unindemnified, uninsured) director contribution settlements in Canada, institutional plaintiffs in the US are known to agree to a settlement only after they have won some level of personal contribution.

The directors might also seek comfort in the “priority of payment” provisions in the policy, but, these were not as common in 2005-2006, and there is limited precedent. My concern for their use is they may motivate a follow-on shareholders claim, or a (current) shareholder attempt to block proceeds of the policy from being eroded by individual director’s defence. Thanks to the Insured vs. Insured exclusions, or other policy limitations, this follow-on claim may be excluded, or further erode the available policy limits.

There may be some critics who will suggest that IMAX will not have a material effect on Canadian directors and officers. For those people I will include a link to some light reading of the recent NERA report, here, on Canadian securities class actions.

I think IMAX will have a material effect on directors, officers, and D&O premiums in Canada, but it might take years for it to play out. If you are not willing to wait that long to fully understand your D&O policy coverage, and the key issues of “continuity”, “sharing of limits”, “limit erosion and exhaustion”, “severability” and the 96 other important terms, please don’t hesitate to contact me directly; Greg Shields, Partner, Mitchell Sandham Insurance Brokers, 416 862-5626, gshields@mitchellsandham.com.

CAUTION: The information contained in the Mitchell Sandham website or blog does not constitute a legal opinion or insurance advice and must not be construed as such. It is important to always consult an experienced and truly independent registered insurance broker and a lawyer who is a member of the Bar or Law Society of the relevant jurisdiction with regard to this material before making any insurance or legal decisions. All material is copyrighted by Mitchell Sandham Inc. and may not be reproduced in any form for commercial purposes without the express written consent of Mitchell Sandham Inc. Anyone seeking to link this site from any external website must receive the consent of Mitchell Sandham Inc. by sending an e-mail to gshields@mitchellsandham.com


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