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Unriddling the Sphinx The Insured v. Insured Exclusion and the Multiple Capacities of D&Os
As directors' and officers' insurance is intended to provide coverage for claims by third parties, most, if not all, D&O policies contain an exclusion commonly referred to as an “insured v. insured exclusion.” The exclusion bars coverage for claims brought by one insured against another insured. Historically, the exclusion was drafted in response to “friendly” and collusive lawsuits arising out of the savings and loan bank crisis in the early to mid-1980s. Essentially, friendly lawsuits were being filed by the failed banks against their directors and officers in an effort to recoup loan losses from the proceeds of D&O policies. Thus, the primary purpose in drafting the insured v. insured exclusion was ' and continues to be ' to prevent a corporation from suing its own directors and officers to obtain the benefits of coverage for itself, rather than third parties.
The exclusion is fairly easy to apply where a solvent corporation brings suit against its current or former directors and officers for breaches of fiduciary duties or where a director or officer brings suit for termination or compensation-related issues. Where, on the other hand, the director or officer brings suit in his or her sole capacity as a shareholder of the corporation, the applicability of the exclusion is more complex. As the analysis of the two cases below indicates, there is little guidance for insurers, as well as insureds, as to how a court will apply the exclusion where the capacity of a director or officer is cloudy. Accordingly, rather than leave the interpretation of the exclusion up to a judge ' with all the subjectivity that may entail ' insureds and insurers are well advised to anticipate and resolve the scope of the insured v. insured exclusion during the negotiation and issuance of the policy.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
CLE Shouldn't Be the Only Mandatory Training for Attorneys
Each stage of an attorney's career offers opportunities for a curriculum that addresses both the individual's and the firm's need to drive success.
Discovery of Claim Construction and Infringement Analysis May be Compelled Prior to a Markman Hearing
A defendant in a patent infringement suit may, during discovery and prior to a <i>Markman</i> hearing, compel the plaintiff to produce claim charts, claim constructions, and element-by-element infringement analyses.