Description of Services

C-Suite

What is the “C-Suite”? 

The term is used to refer collectively to a corporation's most senior executives (e.g. CEO, CFO). However, I use the term more broadly to describe the most important and influential group of individuals at a company, including directors, chairs and trustees. Being a member of this group come with high-stakes decision making - and increasingly, a higher level of personal exposure.

If I discharge my fiduciary duty and duty of care to the corporation, why should I worry about my personal exposure? 

There are a variety of reasons why you may find yourself as a Defendant in a law suit, even if you’ve properly discharged those duties. For example, a Plaintiff may seek to obtain leverage (and deeper pockets) in an action by adding the directors in their personal capacity. As well, Counsel for a Plaintiff may be on a “fishing expedition” and seek to depose directors in the hope of gaining valuable evidence to use against the corporation. Another tactic often employed by Plaintiff’s Counsel is to add the officers and directors in their personal capacity to obtain a settlement from the D&O insurer. While that action is proceeding, who’s going to pay your legal bills?

Why would an officer or director seek your services? 

Increasingly, people in those positions are finding that they are being exposed to potential liability as a result of expanded statutory liability, class actions, more rigorous enforcement of regulations and more expansive court decisions.  Before you accept that new position or agree to join a Board of Directors, you should make enquiries as to what protections are in place for you in the event something “goes sideways”.

What could you do for me? 

If retained, I would meet with you to review your particular circumstances.  That review might include my analysis of any D & O policy that may be in place to protect you – or insisting that one be provided.  It also might include reviewing the by-laws of the corporation and ensuring a proper indemnity is in place.

D&O Policy

What’s a “D&O policy”?  

It’s an insurance policy purchased by the company to protect its directors and officers from claims for their alleged wrongful acts. 

Aren’t all D&O policies the same? 

No, quite the contrary.  Like any insurance policy, the wordings in policies can vary from carrier to carrier.  In addition, there are a multitude of non-standard  exclusions.  Each policy must be individually reviewed to ensure it provides adequate protection to the Ds and Os.

I’ve heard of different layers of coverage in a D&O policy – what’s that all about? 

Usually (but not always) the policy will provide three different layers, Side A, Side B and Side C. 

What’s the difference in the layers? 

Side A protects directors and officers from claims when a company can’t or won’t indemnify them.  Side B pays when the corporation indemnifies the directors and officers.  Side C pays for claims directly against the company. 

From the perspective of a director or officer, which is more relevant? 

No doubt about it – Side A.  The primary focus of the other Sides is to protect the company.

What are some of the provisions in a D&O policy that a director or officer should be mindful of? 

You’d want to ensure that the policy contains, among other things, a provision for the advance of defence costs.  In complex cases that go on for years, legal fees and expenses can be outrageously high.  You don’t want to dig into your own pocket to front-end those expenses.

Anything else that should be included in the policy?  

Yes, you’d want to ensure you’re covered for investigations. In a well-crafted document, the policy would respond at an early trigger point, before a subpoena. If your policy so provides, you’ll sleep better when you get that letter from the regulator who wants to talk to you as part of its “informal investigation”.

Indemnity

What’s an “indemnity”? 

It’s an agreement whereby the company obligates itself to pay the directors’ or officers’ legal fees and expenses and usually any fine or judgment the officer or director is obligated to pay. 

Isn’t my company required by its corporate statute to indemnify me in the event I’m sued? 

Yes and No.  Generally, the company will reimburse the director or officer for legal expenses and other amounts he or she may be required to pay.  However, often there are technicalities and deficiencies in the underlying statute that could result in the director or officer not being fully indemnified.  That’s why it’s important to have a separate contract with the corporation wherein the corporation’s obligations to indemnify you are fulsomely set out. 

Retainer

Rather than retaining you, can’t I rely on corporate Counsel to protect my interests?   

Perhaps, but remember in-house or external corporate Counsel work for the corporation, not you.  There may be occasions wherein they may be in a conflict of interest and therefore may be precluded from providing advice to you.  Best to get your own advice.

Why would I hire you? 

Because, among other things, I have almost 40 years of commercial and insurance litigation under my professional belt.  That experience includes dealing with hundreds of officer and directors and being involved in a number of reported cases involving officers and directors and D&O carriers.  I also have a graduate law degree, have served on Boards, been Chair, and have my ICD.D (certified director) from Rotman’s at the University of Toronto.

Cost

Are you expensive? 

Yes, but not as much as lawyers who occupy Bay Street offices (I know, I’ve been there). 

Will you enter into a fixed fee arrangement? 

Yes, I’m prepared to negotiate a fixed fee arrangement in appropriate circumstances.

If I retain you, can you guarantee I won’t be successfully sued? 

No, no one can.  Judges and juries sometimes do strange things.  What I can do is ensure you have a better level of protection in the event you find yourself named as a Defendant. 

Help... I'm Sued

If I am sued, can I call you? 

Yes, I’ll be there to guide you through the process and ensure you get the top defence lawyers to represent you.  As Counsel to Davies Howe Partners LLP (a firm I co-founded) and having been a litigator for almost 40 years, I know the best litigation lawyers in the D&O business and will ensure you’re in good hands.   

If I have any other questions, how can I contact you? 

By emailing me at howe@robertjhowe.com or calling me at 416-388-2427.