International review

As the financial crisis was global in nature there is no surprise that it has had a global effect, but one ripple which seems to have gained momentum in most jurisdictions is the enhanced focus on regulatory oversight. In the UK a raft of consultations, reviews and reports into the banking industry have resulted in proposals for, amongst others, new legislation making directors personally liable for failed companies and a new criminal offence of ‘recklessly mismanaging a bank’. Hong Kong and India have both seen a complete overhaul of their company laws and Spain proposes to do the same under its Commercial Code Bill. What all this proposed new legislation has in common is the marrying up of corporate decision making and accountability; to a greater or lesser extent depending upon government and regulator appetite for change and how developed the market is. In the new Indian Companies Act, 2013 D&O insurance has been accorded statutory recognition for the first time. The global market has also shrunk as the ripple becomes cross jurisdictional in effect. The Federal Court of Australia’s decision that Standard & Poor’s (S&P) AAA rating of certain investment products was misleading and deceptive and involved negligent misrepresentations to investors has paved the way for filings against S&P in Europe and the US. The jurisdiction of the Canadian courts to prosecute corporate corruption and bribery has also been extended to allow it to bring charges against illicit acts that have taken place overseas. To some extent the above may reflect the increasingly global nature of companies and consumers of their services. The recent decision by the Court of Appeal in Dubai that Barclays was one legal entity so its “onshore” and “offshore” branches had no separate legal identity perhaps reflects this (but also raises a concern as to the extent to which financial institutions and companies operating in the United Arab Emirates might find themselves caught between two regulatory frameworks).