Cyber law and insurance: Four part series providing an overview of the legal and risk landscape

Four corners of the Cyber legal regime

In Canada, several federal and provincial laws and regulations govern cybersecurity and data protection, each addressing a particular issue. Due to its complex nature, businesses should ensure they understand what legislation applies to them and identify what their obligations are under the applicable legislation, as failure to comply can result in significant financial and reputational harm. By understanding this governing framework, organizations can be proactive and implement the necessary procedures to ensure they properly protect their business and clients. This article will provide a brief overview of the relevant statutes, regulations and case law relating to data protection and cybersecurity.

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Calculating Damages in Representations and Warranties Cases

This article is authored by Ephraim Stulberg for MDD Forensic Accountants.

Introduction

Mergers and acquisitions (“M&A”) can be a double-edged sword. When done right, M&A can allow acquirers to scale their businesses and create value through synergies. When done poorly, M&A can result in drastic overpayments for assets that are not nearly as valuable as believed and for economies of scale that are very difficult to achieve.

One of the main risks in M&A is information asymmetry: simply put, the vendor knows much more about its business than the acquirer. While the acquirer is able to perform due diligence, time pressures to close the deal mean that this process can sometimes be imperfect; issues are sometimes missed.  This is where Representations and Warranties (R&W) insurance can come into play.

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Notice requirements for professional liability insurance: Trisura Guarantee Insurance Company of Canada v. Duncan, 2019 NSCA 54

On June 18, 2019, the Nova Scotia Court of Appeal released its decision in the case involving Trisura Guarantee Insurance Company of Canada (Trisura) and Duncan et al. This decision is noteworthy, as it may lessen an insured’s obligation to notify and disclose potential claims, and increase the burden of diligence on the insurer.

Facts

Trisura provided professional liability coverage to Keybase National Financial Services Inc. (Keybase) from July 2008 to July 2012. Gregory Duncan and James White (Duncan and White) were Keybase advisors during this time.

Duncan and White assumed responsibility for John Allen’s (Allen) clients. Allen was also a Keybase advisor.

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Throwing an egg at someone: the hatching of a new legal test addressed in Gilbraith v Intact Insurance Company

Introduction

Many risks associated with driving a vehicle are intuitive; some are not.

Imprecision in identifying the risks of driving influences how insurers assess the value of automobile insurance. A recent Ontario Superior Court decision, Gilbraith v Intact Insurance Company, reminds insurers and insured persons how difficult it can be to properly assess and categorize risk at the outset of an insurance relationship.

This case will likely rise through appellate courts in Ontario, which provides an opportunity for the courts to clarify the risks that an auto insurance policy will reasonably cover.  

Gilbraith v Intact Insurance Company

Stephanie Gilbraith was walking along a sidewalk with a friend when a vehicle approached her from the opposite direction.

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Court dismisses statutory misrepresentation claim against credit union board in landmark decision

For the first time, the Ontario Superior Court of Justice released a decision that considered issues of statutory misrepresentation in an offering statement under the Credit Unions and Caisses Populaires Act, 1994[1] (Act). Polla v. Croatian (Toronto) Credit Union also provides extensive guidance on issues of directors’ and officers’ liability more generally. There is very limited jurisprudence in this area, and this landmark decision is expected to provide valuable guidance to boards and insurers on risk prevention. This insight provides a high-level overview of the decision.

Facts

The plaintiff, Ferdinando Polla (Polla), invested CA1 $5 million in the Croatian Credit Union (CCU) after the struggling credit union filed an offering statement in order to raise funds.

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Khalid v 2262351 Ontario Inc.: Third party discoverability grounded in reasonability

Introduction

In negligence-based actions, defendants routinely issue third party claims for contribution and indemnity to reduce their liability exposure. As a result, the plaintiff can commence a claim believing certain defendants to have caused the plaintiff’s loss, but, after successive third party claims, learn that several other persons might have contributed to the loss. To increase the prospect of recovery, the plaintiff often moves to add these third parties as defendants, long-after the impugned act or omission took place.

In these circumstances, third parties should consider whether to oppose a motion to be added as a defendant pursuant to section 21(1) of the Limitations Act, 2002:

21 (1) If a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding.

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Liability pitfalls and defences for Directors and Officers under federal and provincial cannabis legislation

Introduction

On October 17, 2018, the lion’s share of the federal Cannabis Act1 and the Ontario Cannabis Act20172 took legal effect, marking the legalization of non-medical cannabis across Canada, within defined limits. Directors and officers of federal and provincial corporations in the legal cannabis sector now operate in a new and dynamic regulatory climate.

As with any regulated industry, directors and officers should apprise themselves of the legal pitfalls in the post-legalization world, and liability insurers should prepare carefully for the potential risks that might shadow the cannabis market in its early days.

At a minimum, liability insurers should consider (a) new offences to which directors and officers are exposed, (b) what procedures are in place with respect to those offences, (c) what penalties might a director or officer be liable to pay, and (d) what defences are available, if any.

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