U.S. cases top list of court decisions affecting Canadian insurers

A U.S. Supreme Court decision that reinforced a heightened pleading standard in securities suits was deemed the most important court award or settlement of 2007, according to a Willis Group Holding Canadian alert on executive risks.
While the list of Top 10 court awards and settlements only addresses U.S. cases, “it will be of relevance to Canadian companies with U.S. listings or tradings, as well as all Canadian companies to the extent Canadian insurance companies are impacted by the evolving circumstances of their U.S. parent companies,” a Willis statement says.
In Tellabs, Inc. v. Makor Issues and Rights, Ltd., the U.S. Supreme Court held that to plead fraudulent intent properly, the intent to commit fraud “must be more than merely plausible or reasonable it must be cogent and at least as compelling as any opposing inference of non-fraudulent intent.”
The decision will make it significantly more difficult for suits to survive the pleading stage, Willis says.
Rounding out the Top 5 decisions are: TJX (the first time a company saw, first-hand, the financial implications of a large-scale cyber incident); Stoneridge (still in deliberation, but the court will decide how far legal liability extends in securities fraud cases); Guidant (potentially makes it easier for the plaintiffs’ bar to sue retirement plans and their fiduciaries); and Brocade Communications (proved that the government could win complicated stock option back-dating cases).