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Lauren R. Randell quoted in Business Insurance article, “DOJ policy shift could trigger increased demand for D&O cover”

Business Insurance

Lauren R. Randell was quoted on December 11, 2018 in a Business Insurance article, “DOJ policy shift could trigger increased demand for D&O cover,” which discussed Deputy U.S. Attorney General Rod Rosenstein’s announcement of modifications to the “Yates memo” — the 2016 Memorandum on Individual Accountability for Corporate Wrongdoing — and the implications for companies that do not fully cooperate in a criminal cases. The article stated “Among other things, the new approach says that companies have to identify individuals who were ‘substantially’ involved in the alleged misconduct, but holds that investigations should not be delayed to gather information about people who were not substantially involved and who are unlikely to face prosecution. ‘We revised our policy to make clear that absent extraordinary circumstances, a corporate resolution should not protect individuals from criminal liability,’ Mr. Rosenstein said at the conference. ‘Our revised policy also makes clear that any company seeking cooperation credit in criminal cases must identify every individual who was substantially involved in or responsible for the criminal conduct. The most important aspect of our policy is that a company must identify all wrongdoing by senior officials, including members of senior management or the board of directors, if it wants to earn any credit for cooperating in a civil case,’ he said, adding ‘if a corporation wants to earn maximum credit, it must identify every individual person who was substantially involved in or responsible for the misconduct.’”

Randell noted, “They’ve really indicated that the minimum to get credit from the government is that the company has to give up its senior management and the board who had involvement. That could lead to a greater demand for expanded D&O liability insurance. The revised Justice Department policy puts a focus on senior management without defining what that means in terms of the memo.” She added, “Companies may be asked for greater indemnification provisions. You’re going to end up with more employees with individual counsel and that will increase costs.”

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