We recently spoke to Laura O’Bree, Associate Director, Speciality Lines about some of the distinct challenges and changing expectations in managing Management Liability claims which encompass Directors & Officers, Employment Practices Liability and Corporate Liability.

Laura is a Barrister (Lincoln’s Inn, 2005) & Solicitor of England & Wales (2010). She has over 10 years’ experience working as an in-house claims adjuster and wordings counsel at Munich Re, AIG and AXIS Capital.  She has expertise in dealing with complex multi-jurisdictional claims at every stage from notification through to mediation, litigation and settlement stages. Laura’s experience has been primarily in financial lines, D&O and professional negligence.

What are some of the significant changes or trends in claims you’ve seen recently in management liability claims? 

The key changes are related to the decline in securities claims (namely a lawsuit filed by investors who bought or sold a company’s publicly traded securities within a specific period of time and suffered loss as a result of the alleged violations of securities laws, often involving misleading statements or omissions of material facts) being filed, although it seems unlikely that this will be a sustained decline. 

There has been an increased focus, unsurprisingly, on pharmaceutical companies from allegations of misrepresentations to shareholders to anti-competitive practices. We have also seen an increase in notifications relating to employers’ duties and obligations, separate from the #MeToo claims that we had seen before. These seem to be intrinsically linked to the pandemic as well as the increased awareness and scrutiny of companies’ ESG status. We expect the latter to continue into 2022. We also expect to see a rise in insolvencies, an increase in regulatory investigations and directors being held accountable for cyber-security and fraud risks in the event of a breach and subsequent losses, reputational or financial.

Was there a particular claim that stood out to you, and why?

A claim that comes to mind is the ‘Renren’ or ‘Chinese Facebook’ litigation in the USA, set to be one of the largest shareholder derivate settlements (reportedly settled for around USD 300 million in October 2021) and had looked, unusually, to pay the settlement proceeds directly to the minority shareholders, rather than the company itself. 

Ultimately the settlement did not receive court approval in December 2021, and we watch with interest where the claim may go. It was a particularly complex case because of the interesting forum issues: being a case heard in New York, applying Cayman law and involving a Chinese company based on the Caymans.

What are the key types of management liability claims you’re seeing?

We see a variety and are enjoying seeing an uptick in claims from outside the traditional D&O / EPL arena of the USA. Whilst this remains the most active region for Management Liability claims by far, it is interesting to see an increasingly active market in the Baltic region, amongst others.

Over the past years, we have been assisting Insurers with triage of cases; fact-finding; monitoring; coverage review as well as defence costs review, particularly where coverage has been determined and an allocation has been applied to defence costs. 

What are some of the changes in the market that you’re seeing? 

There have been some interesting start-ups appearing and an increasing move towards the company market. This could lead to an exciting period of innovation in the D&O insurance market in terms of providers and bespoke policies, but we will have to wait and see!

What other business areas within Charles Taylor Adjusting do you work closely with?

Our Specialty Lines team works closely together drawing on linguists and forensic accountants. I also handle financial institutions claims generally, both PI and D&O. We are seeing increasing use of blended policies as well as notifications exposing multiple policies (FI, D&O and cyber particularly) so having wider cyber claims expertise in the team is particularly helpful