Reach of U.S. Hands Across the Waters May Impact
Susan Friedman, Senior Vice President & Employed Lawyers Practice Leader, Marsh Inc, USA
It's been "a hard day's night" for in-house counsel in the U.S. as the "revolution" from corporate confidante to corporate gatekeeper continued through 2007 into 2008. During this transition claims against in-house attorneys in the U.S. included stock options backdating, fraud, insider trading, litigation misconduct, corporate governance violations and negligence. As a .decade first., we witnessed the imposition of prison sentences plus substantial fines for wrongful acts of in-house counsel. Further, as the Sarbanes Oxley Act of 20021 (.SOX.) gained traction in the U.S., several countries sought to implement similar protections to restore investor confidence. In this regard, the European Central Bank and the International Organization of Securities Commissions placed prime importance on regulations, investigations, and "best practices". Finally, the not so "magical mystery tour" for in-house counsel continues with the fear of U.S. market volatility fuelled by the subprime mortgage meltdown, global warming disclosure requirements, electronic discovery ("e-discovery:), attorney/client privilege erosion, international issues including anti-bribery and antitrust actions against foreign executives. All this coupled with a heated regulatory environment and plaintiffs in search of deep-pockets, will certainly at some point have an impact on attorneys practicing law abroad by increasing their exposures to governments, their employers, and outside third parties. Indemnification and protections sought by attorneys in the U.S. may likely make the "wish lists" of their counterparts abroad. This article highlights certain recent exposures experienced by U.S. in-house counsel, discusses potential liabilities of in-house attorneys practicing abroad, and concludes with presenting options for protection of in-house counsel, because wise in-house counsel are not inclined to just "let it be".
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