It has become common place to see news headlines stocked with shocking revelations of cyber hacking and privacy breaches, often pertaining to hundreds of thousands of records. This article, published in February 2015 in the Ultimate Corporate Counsel Guide by CCH Canada Limited, provides a key understanding of the Canadian exposures and what you need to know to manage the risks from an insurance perspective.
Fiduciary liability insurance is often thought of as the ugly cousin of directors and officers liability insurance. Often misunderstood and ignored, Fiduciary Liability insurance is an essential component of any risk management program. This article, published in February 2015 in the Ultimate Corporate Counsel Guide by CCH Canada Limited, offers an essential analysis of fiduciary liabilities in Canada and risk management solutions.
Can a butterfly fluttering its wings cause a hurricane on the other side of the world? In other words, can the after effect of a seemingly insignificant event build and build to result in a catastrophic outcome? When it comes to drafting contracts, it seems the answer is “YES”. One of the extreme examples of this is the so-called “Million Dollar Comma Case”- Rogers Communications v. Aliant Telecom, CRTC Decision 2006-45. In that case, the implications of the smallest of drafting errors resulted in a multi-million dollar outcome when Rogers convinced the CRTC that the insertion of a comma to separate a termination clause from a clause about future renewals allowed the contract to be terminated before its expiry date. Without the comma (which was not present in the French version), the right to terminate was unambiguous.
Canada is no longer a safe haven when it comes to avoiding damages arising out of privacy breaches. Class actions are here. Regulatory and criminal investigations are here and so too are individual actions resulting in damage awards. The losses are mounting and regulators are crying for legislation to impose substantial fines. The times, they are a changing. If you are interested in examples of Canadian breaches where losses have occurred, read on.
Nearly a decade ago, “Bill 198″ was proposed and eventually enacted into law. The amendment to the Securities Act (initially in Ontario and subsequently across essentially all of Canada) was designed to make it easier to bring class action suits against companies that mislead investors when they traded on the secondary market. The changes removed an arduous requirement that shareholders prove they relied on faulty disclosures when they invested on the secondary market, which requirement had previously been the death knell of class actions. That was then; where are we now with secondary market actions?
Bill 198 sought to avoid some of the perceived deficiencies our neighbours to the south had experienced with frivolous lawsuits, the so-called “strike suits”, brought by plaintiffs who believed that companies would quickly pay out to get them to go away, even absent compelling evidence. And, it was often the case that companies, and insurers, did. The Canadian amendments include provisions that put into place safeguards to guard against this type of behaviour. Although secondary market suits under the new provisions have been slow off the mark in Canada, the last couple of years have finally brought judicial developments that are helping to shape the landscape.