The D&O Diary was on assignment last week in Australia, to attend and participate in the annual conference of the Australian Professional Indemnity Group (APIG), in Sydney. As a result of my travels to the conference, I once again experienced the miracle of modern technology. You can leave your home in, say, Cleveland, and less than 24 hours later you can be walking on a beach in Australia. I have made this trip or its equivalent many times now, but it still never ceases to amaze me.
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Australia
Guest Post: Company Directors Who Cannot Read or Understand English Warned by Australian Court
In our increasingly global economy, corporate boards are increasingly diverse, and among the diversities boards increasingly encompass are geographic and cultural diversity. However, while diverse directors may serve for many reasons, they still must be able to discharge their duties to the corporation. In the following guest post, Christopher Smith of the Sydney office of the the Clyde & Co. law firm, take a look at an interesting recent case from an Australian Court, in which the court held that directors who sign corporate documents must be able to read and understand the documents in order to discharge their duties. A copy of the August 11, 2016 Federal Court of Australia ruling to which Chris refers in his guest post can be found here. I would like to thank Chris for allowing me to publish this article as a guest post on this site. Readers interesting in submitting guest posts should contact me directly. Here is Chris’s guest post.
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Is Australia About to Become the Global Forum of Choice for Securities Class Action Litigation?
As I have noted in prior posts, in recent years, there has been a significant growth in shareholder class action litigation in Australia. There are a number of reasons for this development; among other things, Australia’s class action regime is, by comparison to the procedures available in many other jurisdictions, plaintiff-friendly. For these and other reasons, according to a recent law firm memo, Australia may be poised to become “the forum of choice for plaintiffs seeking redress in the world of securities class actions.” The June 27, 2016 memo, which is written by the Quinn Emanuel law firm and is entitled “Australia: An Increasingly Attractive Plaintiffs’ Forum for Securities Class Actions,” and raises a number of interesting questions, as discussed below, and can be found here.
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Public Enforcement of Directors’ Duties in Australia
Australia has long been in the vanguard when it comes to enforcement of duties of corporate directors. Australia was the first English-speaking jurisdiction to introduce statutory directors’ duties in 1896, and the first English-speaking jurisdiction to introduce criminal sanctions to enforce statutory directors’ duties in 1958. However, following the recent global financial crisis, questions were…
Publicly Traded Australian Plaintiffs’ Securities Law Firm Slater & Gordon Faces Possible Securities Suit
In May 2007, Sydney-based plaintiffs’ law firm Slater & Gordon listed its shares on the Australian Stock Exchange, becoming the world’s first publicly traded law firm. On its website, the firm touts its “outstanding record” in class actions and group actions. As the firm’s website also highlights, the firm has been an active in pursuing securities class action lawsuits in Australia. More recently, however, the firm has recently experienced some financial turbulence, as a result of which its share price has plunged. Now, in a twist that can only be called ironic, the firm may be facing a class action lawsuit of its own.
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Criminal Proceedings, D&O Insurance and Corporate Indemnities
Here’s the scenario: A former company CEO faces criminal charges for alleged bribery in which he was involved while he was at the company. The company’s D&O insurance provides funding for his defense, but the amount of the insurance available proves to be insufficient to take him through trial. The officer then seeks to have…
D&O Insurance: The Major Shareholder Exclusion
An exclusion sometimes found in D&O insurance policies precludes coverage for claims made by shareholders who have a specified percentage of ownership in the insured company. This type of exclusion is called a Major Shareholder Exclusion (or, sometimes, the Principal Shareholder Exclusion). An interesting May 6, 2015 decision (here) by the Supreme Court…
The D&O Diary Goes Down Under
The D&O Diary is on assignment in Australia this week. Here’s what you need to know about Sydney in late February – if you traverse the vast expanse of the Pacific Ocean, fly across the Equator and the International Date Line, and then finally arrive Down Under, when you get there, it is summer. Warm,…
Class Action Litigation Developments in Australia
There were a number of key class action litigation developments in Australia during 2014, according to a recent memo from the Jones Day law firm. Among other things, there were significant developments in particular in the securities class action litigation arena, according to the memo. The memo, which is entitled “Class Actions in Australia: 2014 …
Sounding the Securities Litigation Alarm in Australia
In an interesting and provocative article, an Australian attorney has sounded the alarm on escalating securities class action litigation in his country. The May 2014 article, written by John Emmerig of the Jones Day la firm’s Sydney office, is entitled “Securities Class Actions Escalate in Australia” (here). The article suggests that in light …