A legitimate concern for directors and officers, individual liability is a topic of regular discussion with our D&O liability insurance clients.
In this podcast series, we explore developing areas of individual liability with distinguished legal and underwriting experts.
Defences available to non-US companies sued derivatively in US courts
In episode four, Audra Soloway and Dan Sinnreich, litigators with Paul, Weiss, Rifkind, Wharton & Garrison LLP in the US, discuss several defences available to directors of non-US companies who are sued derivatively in US courts.
The threshold defences that directors and officers of non-US companies can use to try to get these cases dismissed from the outset, including:
- Arguments as to who is and isn’t permitted to bring shareholder suits.
- Arguments that a court lacks personal jurisdiction over directors and officers to make judgements with respect to them.
- The forum non-conveniens or ‘unsuitable tribunal’ defence.
The arguments directors and officers can make that a case is simply wrong on its merits. Of course, this is always dependent upon the facts of a case, including:
- Arguments that factual allegations fail to state a claim as a matter of law.
- A statute of limitations defence.
- Cases where companies have charter provisions exculpating directors from all claims except those based on fraud, bad faith, or disloyalty.