Thursday, March 9, 2017

Risk News: ABA + Insurance, Clients + Confidentiality





"ABA begins offering cyber liability insurance to lawyers, law firms of all sizes" --
  • "The American Bar Association has expanded its insurance offerings to include cyber insurance, adding a well-timed line of insurance to its coverage that already includes life, disability, dental, vision and travel insurance for law firms."
  • "The innovative insurance is underwritten by Chubb Limited and includes cyber coverage for a firm’s own expenses, such as network extortion, income loss and forensics, associated with a cyber-incident as well as for liability protection and defense costs. The coverage can be tailored to meet a law firm’s unique needs and also includes Chubb’s loss mitigation services both before an incident and following an incident."
  • "In recent years, the legal profession has become a popular target for hackers. Despite vigilance and increased awareness by law firms and individual lawyers, cyber-related risks have escalated based on the sensitivity and nefarious uses of that data. Last year, for example, the Manhattan U.S. attorney’s office unsealed indictments against three Chinese men who are accused of using stolen law firm employee credentials to access troves of internal emails at two law firms. The men, according to prosecutors, used details they obtained from partners’ emails about pending deals to make more than $4 million in illegal stock trades."
  • "'Cyber insurance coverage is a valuable and practical member benefit for lawyers offered through the ABA Insurance portfolio,' ABA President Linda A. Klein said. 'As the number of cyber breaches increases everywhere and throughout all industries, it is critical that lawyers and law firms that rely on vast amounts of electronic data are protected. As the legal profession evolves, the ABA remains at the forefront in providing attorneys the tools they need to thrive.'
  • "A whistle-blowing general counsel won an $8 million federal jury verdict earlier this month, in a case that might encourage other GC’s to call out corporate wrongdoing."
  • "After deliberating only three hours, the jury in Wadler v. Bio-Rad found that the GC had a reasonable basis for reporting his suspicions about the company’s Chinese sales operations to the organization’s audit team."
  • "But the jury found that the company had retaliated against the GC by firing him after the report, in violation of the Sarbanes-Oxley Act, and that absent the report, he would not have been terminated for legitimate reasons."
  • "The award to the GC included $5 million in punitive damages... the GC’s lawyer attributed the punitive damages to the company  CEO’s creation of a back-dated negative performance review; computer metadata proved that the review hadn’t been created until after the GC had been fired.Whether the Bio-Rad case will be upheld, and whether it is a trend or an outlier, remain to be seen.  But in the short run, it may encourage other GC’s to blow the whistle."
"Akin Gump, 2 Other Firms Face DQ Bid In Ameranth IP Row" --
  • "Akin Gump Strauss Hauer & Feld LLP, Alston & Bird LLP and Norton Rose Fulbright LLP should all be barred from serving as counsel in a consolidated suit over patents covering online-ordering technology, said Ameranth Inc. on Friday in California federal court, renewing disqualification bids put on hold by a three-year case stay."
  • "The Friday filings reiterate a 2013 disqualification bid centering around former Magistrate Judge Charles Everingham, who oversaw a separate Amaranth suit that targeted three of the four patents tackled by the consolidated litigation. Everingham later joined the private sector and became a partner at Akin Gump, where he worked with Stein before Stein left for Alston & Bird, according to the motion."
  • "In another Friday motion, Ameranth also asked to disqualify Jim Warriner and his current firm Norton Rose Fulbright LLP, saying Warriner previously clerked for Everingham during his tenure as a magistrate, thus connecting him to the previous patent litigation. Warriner represents hospitality defendants including Expedia, Hotwire and Fandango."
  • "According to the filings, Everingham presided over at least one precursory case, Ameranth v. Menusoft, from 2007 to 2011 and sat in on confidential settlement meetings with Ameranth’s principals before joining the law firm.'These facts call into question whether Akin Gump could have possibly adequately screened Mr. Everingham from the matters involving Ameranth,' the motion said."

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