ADVISEN REPORTS POTENTIAL SURGE IN SHAREHOLDER SUITS,
AS D&O LIABILITY MARKET SHIFTS IN EUROPE
Shareholder Activism and US-Styled Litigation Tactics Making D&O Liability Insurance More Prevalent on Continent
GENEVA/October 1, 2007 – Analysts predict a potential surge of lawsuits stemming from the growing corporate governance and accounting scandals across Europe, according to the first edition of a new report from Advisen, Ltd., the leading provider of analytics and information services for the global commercial insurance industry. New accountability standards for corporate directors and officers, an emboldened legal community and shareholder activism are creating a more hospitable environment for American- styled collective lawsuits, the report says.
The report is the first in a series of quarterly reports on corporate governance, shareholder litigation and directors & officers liability insurance in Europe from Advisen, which is based in New York and has offices in London.
According to the Advisen report, corporate governance and accounting scandals have cost European investors billions of Euros in recent years, leading to new disclosure requirements, enhanced shareholder protections, and a greater willingness on the part of investors to litigate. The growing number of shareholder lawsuits from increasingly demanding minority shareholders, and more stringent corporate governance and financial disclosure standards, has contributed to new market opportunities for directors and officers liability insurance, a product that was virtually unknown in Europe a decade ago, the report says.
“Shareholder activism has been commonplace in corporate America for some time, but until recently Europe had been relatively immune to litigation resulting from lapses in corporate governance or questionable accounting practices,” said David Bradford, editor-in-chief of Advisen and author of the inaugural report chronicling the rapidly growing D&O liability insurance market in Europe. “The dynamic nature of this market, and our prediction that it will remain dynamic for some time, compelled us to offer clients a perspective on the governance, litigation and insurance trends.”
As scandals continue to plague European boardrooms, some analysts point to a series of factors that portend a gathering storm for litigation. Institutional investors have become more active in policing corporate governance and are ready to resort to litigation to recoup losses or assert their will on corporate boards. Fueling this willingness to sue is a new crop of lawyers and plaintiffs who have gained the experience – and the outside funding – to litigate more effectively against directors and officers across Europe. Add in U.S. law firms with deep experience in class action litigation that are bringing their expertise to Europe and some analysts see a potential epidemic in lawsuits, according to the new Advisen report.
About Advisen
Advisen Ltd. equals success for insurance professionals, driving growth and profitability through the broadest platform of analytics and information services. Designed and evolved by risk and insurance experts, and used daily by more than 100,000 professionals, Advisen combines the industry’s deepest data sets with proprietary analytics and applications that drive the risk and insurance lifecycle. Advisen is headquartered in New York with offices in London. For more information, visit www.advisen.com or call 212.897.4800.