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
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 have all
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.
