Directors and company executives are held to high standards by shareholders and the courts. Legislative change and social campaigns such as the #MeToo movement have increased exposure at board level. The Australian Financial Review reported a 300% spike in D&O premiums last year in response to a “skyrocketing” number of share price-related class actions.
In this environment of intense scrutiny, ensuring that your D&O policies provide adequate coverage is an essential first step. We advise many insurers and self-insured corporate clients on coverage, appropriate policy wording and endorsements.
Our D&O team have a market-leading reputation representing insurers and directors of some of Australia and New Zealand’s largest companies. This includes regulatory investigations and individual claims, together with many of the leading D&O class actions in the market today. We also handle claims for primary and excess insurers arising internationally.
Executive accountability and culpability will continue to broaden – legislators and the courts are taking a more extended view of responsibility for continuous disclosure issues, consumer business practices, occupational health and safety breaches, employment practices, as well as privacy and data security breaches particularly the growing threat from cyber attacks.
Recent work
The directors and senior managers of a newly listed ASX computer software company in relation to their directors’ duties, including their obligations under the Privacy Act and the Australian Privacy Principles.
A complicated brief involving 17 directors and officers across three ‘camps’ in proceedings brought by a beverage company relating to its $1.2 billion acquisition of a liquor distributor.
The Commerce Commission’s highly publicised ‘Trade Me’ investigation and civil proceedings against a director of a real estate franchise. We ran the first successful defence of an anti-competitive conduct price fixing case in New Zealand in 20 years.
W+K acted for the former chairman of United Petroleum Holdings Pty Ltd (UPH), an entity formed for the purpose of listing United Petroleum’s substantial fuel business on the ASX. This listing, which was intended to occur by December 2016, did not take place after it was determined that the relevant materials were not in a sufficiently complete state to complete the listing by that date. The IPO did not proceed and United sued its chairman and advisors to the listing, Herbert Smith Freehills, alleging that they breached their duties and prevented UPH from listing by December. In turn, Freehills sued United for its unpaid fees.
The two proceedings were heard over 19 days before Justice Elliott of the Supreme Court of Victoria and examined important questions regarding directors’ duties in the context of an initial public offering, particularly as to the role and obligations of a non-executive chairman when faced with determined executive directors pressing for a certain result.
W+K successfully defended the claims against the chairman, with His Honour finding that he acted appropriately, and in line with his duties, at all times. Freehills was also wholly successful in its defence and in its claim for unpaid fees. That finding was upheld on appeal with indemnity costs awarded in favour of our client.