Many employers are awaiting the U.S. Supreme Court's ruling this year in Erica P. John Fund Inc. v. Halliburton Co., when the court will decide what burden of proof shareholders alleging monetary losses must meet to qualify for a class action, rather than individual lawsuits.
Ann Longmore, New York-based executive vice president of FINEX North America, a unit of London-based Willis Group Holdings P.L.C., said the court's ruling could significantly affect companies' vulnerability to securities class action lawsuits.
“The big question hanging over the D&O market for 2014 is what the Supreme Court is going to do in the Haliburton case,” she said. “While no longer the lion's share of D&O litigation in terms of frequency, class actions are still the most significant slice of the pie from a severity standpoint.”
The dispute at the heart at the case dates back to 2002, when an investment fund for the Archdiocese of Milwaukee sued Halliburton, alleging the company falsely represented its asbestos liability, a claim Halliburton has denied.