Author: National Law Forum

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4th Annual SOX/MAR for Insurance Conference 14-15 Apr 2011 Boston, MA

The National Law Review is a proud Media Sponsor of the 4th Annual SOX/MAR for Insurance Conference April 14 -15 in Boston, MA 

This fourth annual conference comes at a critical time for re/insurance companies. Organizations will need to file for the first time their audited statutory statements under MAR in June 2011.

This event will bring together top-level executives to discuss the challenges and requirements when it comes to NAIC compliance for the re/insurance industry.  It will examine SOX and MAR strategies that re/insurance companies can implement to create consistent controls and documentation within their organization. The conference will also include a thorough examination of up-and-coming technological advances that are available to increase efficiency.

By engaging with their peers on these and other critical topics, attendees will leave the conference with a clear understanding of how to approach SOX and MAR to increase performance and effectiveness while decreasing cost and time.

key conference topics include:

  • Evaluate the NAIC regulations for Model Audit Rule and what is needed to reach compliance for June 2011
  • Improve communication between business units to increase performance and efficiency with documentation and controls
  • Utilize information technology to streamline controls, documentation and spreadsheets for both SOX and MAR compliance
  • Enhance SOX and MAR controls to increase efficiency for statutory financial statements
  • Discuss how automated controls can increase effectiveness and decrease cost
    • To Register and for more information – please click here:


    Europe Just Cost Women a Bunch of Money on Their Car Insurance By Switching to Gender Equality

    In honor of International Women’s Day – we at the National Law Review want to point out that every rainbow also has it’s rain as pointed out today by the Risk Management Monitor : 

    Males have by and large run this planet since Neanderthals were drawing on walls in caves. So when we talk about improving gender equality, we are generally talking about things that are immediately beneficial to women. A recent ruling by the European Court of Justice, however, is likely going to cost female drivers some money.

    The court has found that tying insurance rates to gender goes against Europe’s Fundamental Charter of Rights. So come December 2012, insurers will no longer be able to do it. The actuarial science regarding male and female drivers, particularly those under 25 years old, couldn’t be clearer. Young men get into more and more expensive accidents than your women. Still, while the numbers don’t lie, I have always wondered why that fact makes it OK to discriminate.

    Apparently the court agreed.

    Claire Wilkinson of III’s Terms + Conditions blog explains the likely fallout.

    In the past, insurers relied on a 2004 directive that recognized the strength of the evidence for gender-based rates. The average claim for an 18-year-old male in the U.K. totals £4,400 ($7,160), vs. £2,700 ($4,390) for an 18-year-old female.

    The net effect: Women will be subsidizing men for auto insurance. One British insurer estimated that women under 25 years could pay 25% more per year – perhaps £400 ($650).

    The ruling affects other types of insurance, too. Women live longer, so they traditionally paid lower rates for life insurance. (The insurer could earn more investment income off the premium while waiting for the woman’s demise.) So women will see life insurance rates rise, perhaps by 20%.

    This issue is obviously a thorny one.

    On the one hand, equality is good. On the other, the insurance industry just lost a major, effective way to underwrite risks and properly price rates. Claire brings up the notion of credit ratings being used as a rate-setting metric as well, another thing that always struck me as irrelevant to car-driving ability. Again, the numbers there show some pretty definitive trends but, logically, the connection seems like one inappropriate to the policies that drivers are purchasing.

    But what do I know?

    I take the subway to work and have never even owned a car.

    UPDATE: Canadian Underwriter ran a good piece on this development that includes the following insights about the marketplace uncertainty the decision has created.

    The court’s decision will create some uncertainty in the market during the transitional period, says Noleen John, a legal consultant for international legal practice Norton Rose LLP.

    “Insurers will from December 2012 need to apply unisex rates,” said John. “This transitional period is less than that recommended by the Advocate General and means that insurers will need to review their policies and practices as soon as possible.

    “It also seems likely, in view of the length of the transitional period, that insurers may need to use uncertainty premiums until they have sufficient data in relation to the carrying on of business on this new basis. This could result in higher premiums or lower benefits for certain policyholders (female motorists and male annuitants).”

    The decision also may create some uncertainty about the future of other established actuarial factors used to establish insurance premiums.

    “There is going to be uncertainty in the insurance market for some time as a result of this decision,” says Ashley Prebble, insurance partner atNorton Rose LLP. “It is likely that the decision will require the European Commission to clarify the position with regards to other potential areas of discrimination, particularly age and disability.”

    We shall see.

    Risk Management Magazine and Risk Management Monitor. Copyright 2011 Risk and Insurance Management Society, Inc. All rights reserved.

    7th Securities Litigation and Enforcement Summit April 26-27 New York, NY

    The National Law Review is proud to be a media partner for the upcoming IQPC’s 7th Securities Litigation and Enforcement Summit –  April 26-27 in New York, NY.   This two day event will feature panel discussions, case studies, contemporary insights and practical advice vital to the successful management of securities litigation. 

    The second half of 2010 the securities industry witnessed a rise in class action suits mainly due to an increase of undisclosed product and operational defects, breaches of fiduciary duties and accounting improprieties. Securities litigation and associated risk is thus once again front and center in the legal landscape.

    ATTEND AND LEARN ABOUT:

    • SEC, DOJ and State Attorneys General enforcement initiatives and actions
    • New enforcement initiatives under the Frank Dodd Act – what will be the impact for securities litigation cases?
    • Developing effective strategies to respond to and resolve government enforcement actions
    • Aligning litigation strategy with macro economic considerations
    • International trends impacting US based securities litigation
    • Recent trends in Insider Trading and Fraud investigations

    Register By Friday March 25th and Save:

    Please click here for more information and to register:


    Foreclosure or Deed in Lieu: What’s Right for You?

    This week’s featured bloggers at the National Law Review are from Williams Mullen.  Jamie Watkins Bruno details two options available in Virgina for defaulted loans secured by deeds:  

    In Virginia, a lender holding a defaulted loan secured by a deed of trust has two primary means to enforce its remedies under that deed of trust: foreclosure by a trustee’s sale and conveyance by a deed in lieu of foreclosure. We’ve put together a brief primer summarizing the key strengths, weaknesses and procedural guidelines for each alternative to help you determine which option works best for your needs, timeline and budgetary constraints.

    I. Trustee’s Sale.

    The most common procedure for foreclosure is the sale of the property by a trustee, a non-judicial action. A trustee can act only in a manner authorized by the express or implied terms of the trust instrument or as authorized by statute. If the deed of trust does not provide otherwise, the provisions of the Virginia Code control as to the authority of the trustee. Foreclosure by a trustee’s sale can usually be completed within thirty (30) to forty-five (45) days after the expiration of any cure period provided by the loan documents for the default giving rise to the foreclosure, if the lender acts promptly.

    A. The Trustee.

    1. Duties and Obligations. A trustee is a fiduciary for both the debtor and the creditor. The trustee must not place himself in a position where the trustee’s personal interests conflict with the interests of the parties to whom he owes a fiduciary duty. A trustee who is counsel to or an employee of the noteholder must be sensitive to the obligation to discharge his fiduciary duties in an impartial manner. The mere fact that a trustee in a deed of trust securing a debt due to a corporation is a stockholder, member, employee, officer or director of, or counsel to, the corporation, however, does not disqualify him from exercising the powers conferred by the trust instrument. Trustees cannot act as purchasers, directly or indirectly, at their own sales; when a trustee buys directly or indirectly at his own sale, that constitutes constructive fraud, and the transaction is voidable. This rule also applies to a trustee who is named in a deed of trust but does not act.

    2. Substitution of Trustee. If the person who is to conduct the foreclosure is not named in the deed of trust as trustee, a substitution of trustee is needed. When an instrument appointing a substitute trustee has been executed by the holders of more than fifty percent (50%) of the secured obligations, the substitute trustee can immediately execute all powers granted to the prior trustee.

      B. Initial Procedures.

      1. Documentation. A trustee should secure the proper documentation from the noteholder, which includes the deed of trust, the original note, title evidence (including title policies and surveys), copies of any correspondence between the noteholder and the debtor, copies of mortgage insurance or guaranty agreements, appraisal, written direction to proceed with the foreclosure and engagement letter. The trustee should verify that the noteholder has complied with all notice requirements set forth in the deed of trust.

      2. Diligence. A trustee should contact the local commissioner of accounts regarding fees charged for approving and examining accounts as well as any local requirements, including proper advertisement procedures. Though the trustee is only charged with selling the property encumbered by the deed of trust, the noteholder should consider any relevant diligence issues affecting the property prior to initiating foreclosure proceedings, including environmental matters, permits, insurance, utilities, leases, appraisal, physical condition and rights in fixtures. In addition, though there is no statutory right of redemption in Virginia, the debtor does have the right to pay off the secured indebtedness before the sale; some deeds of trust provide for reinstatement of the debt if the debtor cures all defaults and pays all expenses in the manner and time provided in such deeds of trust.

      3. Title. While the doctrine of caveat emptor applies in a foreclosure sale, a trustee must be aware of all liens and encumbrances affecting the property. A trustee cannot sell a greater interest in the property than the deed of trust gives him authority to sell, and any sale by the trustee will be subject to encumbrances having precedence over the deed of trust. A trustee must be aware of all encumbrances on the property, including federal tax liens, in order to properly notify all interested parties, to exercise proper discretion as to whether a fair sale can be had, and to make a lawful distribution of the proceeds of the sale. A trustee should order a title rundown of the property from the date of the original title policy, which can be obtained for approximately $100-$250.

        C. Notice.

        The trustee has no authority to exercise the power of sale or to obtain possession of the property until such time as the debtor defaults under the terms of the note and the trust instrument. The trustee must satisfy himself that the note and the deed of trust are actually in default before initiating foreclosure proceedings, including providing any pre-acceleration notice required by either document.

        1. Requirements; Timing. The present owner of the property must be given written notice of sale at his last known address as such address and owner’s name appear in the records of the secured party, which must be personally delivered or sent by registered or certified mail at least fourteen (14) days before the date of the foreclosure sale. It is a good idea to send a separate notice to each owner by regular mail. Each such must provide the date, time, and place of sale and is sufficient if it contains the same information set forth in the public advertisement of the sale. ‘Inadvertent’ failure to give notice imposes no liability on either the trustee or the secured party, and failure to comply with the notice requirements will not affect the validity of the sale. A purchaser for value will have no duty to ascertain whether proper notice was given. Actual receipt by the owner of the foreclosure notice is not required, and a defective statutory notice does not affect the validity of a foreclosure sale.

        2. Other Parties. Notice should also be given to any guarantors of the indebtedness, subordinate lienholders, private mortgage insurers, the United States (if a federal tax lien affects the property) and any government agencies that are involved with the secured loan. If a federal tax lien affects the property and has been filed for at least thirty (30) days before the date of the proposed sale, notice should be given to the United States at least twenty-five (25) days prior to such sale.

          D. Advertisement.

          A trustee must conform the advertising to the terms of the deed of trust, and any material departure will invalidate the sale. Substantial compliance, however, is sufficient as long as the rights of the parties are not materially affected. Section 55-62 of the Virginia Code provides a permissible form of notice that must include the time, place, and terms of sale, including the amount of any deposit required. The advertising provisions are mandatory and override the discretion of the trustee, regardless of the contractual agreement of the parties.

          1. Requirements; Timing. The advertisement must briefly describe the property to be sold by street address, if any, and, if there is no street address, the general location of the property with reference to routes, streets, and known landmarks. The tax map identification number of the property may be used but is not required. The advertisement must also include the name, address, and telephone number of the trustee and the secured party, or the secured party’s agent or attorney, to respond to inquiries from the public about the sale. Advertisement of the foreclosure must be made in a newspaper having a general circulation in the city or county where the property being sold or any portion thereof lies. The sale can be held no earlier than eight (8) days after the first advertisement and no later than thirty (30) days after the last advertisement.

          2. Number of Publications. If the deed of trust provides for the number of publications by using language such as “advertisement required,” then the direction of the deed of trust must be followed. In any event, if the newspaper advertisement is published on a weekly basis, it must be published not less than once a week for two weeks before the sale; and if published on a daily basis, it must be published not less than once a day for three days, which may be consecutive days. If the deed of trust does not provide for the number of publications, the Virginia Code requires that “the trustee shall advertise once a week for four successive weeks; provided, however, that if the property or some portion thereof is located in a city or in a county immediately contiguous to a city, publication of the advertisement five different days, which may be consecutive days, shall be deemed adequate.”

            E. The Sale.

            There are virtually no rules regarding bidding at a foreclosure sale, other than that the purchase price of the property must not be so low as to ‘shock the conscience’. The sale may take place “at the premises or at such other place in the city or county in which the property or the greater portion thereof lies, or in the corporate limits of any city surrounded by or contiguous to such county.” Most sales take place on the front steps of the city or county circuit court building. In the absence of specific direction in the trust instrument, the trustee is authorized to sell “upon such terms and conditions as the trustee may deem best.” This language has been interpreted to include the power to sell either for cash or on credit. The trustee must be present and either conduct or supervise the sale. In the absence of specific authority in the deed of trust, a trustee cannot, even with the consent of the lender, delegate the power to sell and be absent from the sale; the trustee may employ an auctioneer to cry out the sale. Prior to bidding, the trustee should announce the terms of sale and answer any general questions from the public. The trustee should disclose fully any known liens or encumbrances. A contract of sale between a trustee and a purchaser is complete when the trustee knocks down the property to the highest bidder and makes and signs a memorandum of the sale and its terms. The trustee may require a deposit, and a closing will be scheduled for approximately ten (10) to thirty (30) days after the sale, all as set forth in the advertisement. In the event that there was a federal tax lien on the property, the government has a right of redemption for a period of one hundred twenty (120) days, meaning that the government may take the property and reimburse the purchaser for the amount paid within this time frame. The trustee may request the waiver of such right upon the delivery of the notice of sale.

              F. Settlement and Accounting.

              A purchaser can only require a deed with special warranty of title from the trustee. The trustee is not responsible for conveying good title, because a trustee can sell only the interest conveyed to him under the deed of trust. Recordation tax to be paid upon recordation of the deed is the greater of the amount bid at the sale or the assessed value of the property. The trustee must receipt for the proceeds. Any proceeds from the sale must be applied in the following order: to discharge the expenses of executing the trust, including the trustee’s commission; to discharge all taxes, levies, and assessments, with costs and interest, including the due pro rata thereof for the current year; and to discharge in the order of their priority, if any, the remaining debts and obligations secured by the trust instrument, and any liens of record inferior to the trust instrument under which sale is made, with lawful interest. Any residual proceeds shall be paid to the debtor or his assigns. Within six months of the sale, the trustee must file an accounting of sale, including the original note, and all vouchers for his expenses with the local commissioner of accounts. The secured party may sue the debtor or any guarantor for any deficiency between the amount of the proceeds of the sale applied to the note and the amount of indebtedness outstanding thereunder.

                G. Advantages and Disadvantages.

                In Virginia, a trustee’s sale is a relatively quick and efficient means of foreclosing on real property. Once the sale has been completed, the purchaser will own the property free and clear of other junior encumbrances (provided that the junior lienholders were properly notified). However, the lender must be cognizant of the procedural and timing requirements in order to properly coordinate the trustee’s sale, and the foreclosure process can be more expensive than acquir4ing the property by a deed in lieu.

                  II. Deed in Lieu of Foreclosure.

                  With a deed in lieu of foreclosure, the grantor transfers the fee simple title to the property encumbered by the deed of trust to the lender under the deed of trust. The lender contemporaneously releases the lien of the deed of trust and forgives or stipulates the liability of the obligors under the obligations secured by the deed of trust.

                  A. Advantages. Acquisition by a deed in lieu can be advantageous to a debtor, as the process minimizes damage to the debtor’s reputation and credit rating by avoiding a formal foreclosure and creates substantial savings in costs, expenses, attorneys’ fees and trustee’s fees. The lender may find significant benefits as well, such as efficiency and the ability to obtain quick control of the property to effect its completion, rental or sale to a third party.

                    B. Disadvantages. A lender should be aware of the potential disadvantages to obtaining property by a deed in lieu of foreclosure. The lender will own the property subject to junior encumbrances (which are normally extinguished by a foreclosure sale) and all obligations of the former owner (including building code violations and environmental responsibilities). The debtor’s creditors may attack the sale as a fraudulent or voluntary conveyance if the value of the property greatly exceeds the value of the loan forgiven; and any guarantor that did not consent to the transaction may assert that the guarantors and debtor are released from any deficiency claim.

                      © 2011 WILLIAMS MULLEN ALL RIGHTS RESERVED

                       

                       

                       

                      ANALYSIS — U.S. Interests at Risk in Six Mideast Nations

                      Very comprehensive article about the U.S.’ Middle East interests posted yesterday at the National Law Review by Barbara Slavin writing for the Center for Public Integrity:

                      Political unrest and violence in the Mideast are unsettling to American interests in the region in the short term. Credit: Kevin Frayer/The Associated Press

                      For decades, politics in most of the Middle East has been frozen like a fossil in amber. Monarchies and pseudo-republics denied their people meaningful participation and representation. Aging presidents-for-life clung to power, grooming sons to replace them. Well-connected elites amassed wealth while burgeoning young populations struggled to find jobs.

                      The amber has shattered. Mideast dictators have fallen to people power, not U.S.-led regime change. Now the critical question is who will replace these leaders?

                      The end of this era could be a net-positive for the United States if more democratic governments take hold. In the short term, though, these developments bring with them potential threats to U.S. interests: safeguarding oil supplies, protecting Israel, fighting terrorism and containing the current Iranian regime. The biggest impact may be regional dynamics that curb Israel from attacking foes in Gaza, Lebanon and Iran.

                      With the proviso that this fateful year in the Middle East is just beginning, what follows are snapshots of six pivotal nations whose post-revolution politics and policies will impact U.S. national security:

                      Egypt

                      The most populous Arab nation, Egypt has vied with Saudi Arabia as the premier Arab ally of the United States. Once the trend-setter in Arab politics, culture and diplomacy, Egypt stagnated during Hosni Mubarak’s 30-year reign. With Mubarak’s resignation Feb. 11, a “supreme defense council” led by Defense Minister Mohamed Hussein Tantawi is leading the transition. The military has promised to submit a new constitution to a referendum and then hold elections for a new parliament and president.

                      Mubarak’s successor is likely to maintain the 1979 peace treaty with Israel—even if the Muslim Brotherhood, the oldest Islamic political group in the modern Middle East, gains a major share in the next government. As a nation that relies on tourism, Egypt cannot afford to renounce peace with Israel or to impose Islamic law. The Egyptian military will not want to jeopardize its supply of U.S. military hardware. However, a more democratic Egypt will not be silent if Israel attacks Gaza again as it did in 2008-2009, or Lebanon in 2006. Egypt is likely to lift a blockade on Gaza imposed after Hamas seized the enclave in 2007, making it easier for Hamas to smuggle weapons via the Sinai desert. Egypt may also restore diplomatic relations with Iran, which the U.S. will see as a blow to its containment strategy. Already, the interim government permitted an aging Iranian warship and supply vessel to transit the Suez Canal and enter the Mediterranean—the first such crossing since the Iranian revolution.

                      On counterterrorism, the Egyptian government is less likely to make mass arrests or to accept, via rendition, terror suspects caught elsewhere by the United States.  Bruce Riedel, a former senior National Security Council official and CIA officer dealing with the Middle East, said that a less repressive Egyptian government will benefit U.S. interests in the long term by diminishing the pool of recruits for al-Qaida. Still, the transition may be dicey. “While we may lose on the tactical level, we may gain on the strategic level,” he said.

                      Saudi Arabia

                      Saudi Arabia is the region’s great economic prize, sitting on top of one fifth of the world’s known oil reserves. King Abdullah, who has ruled officially since 2005 and de facto since 1995, is progressive in Saudi terms and has introduced a few modest reforms. Still, the upheaval nearby was sufficient for the king to rush home from Morocco, where he had been recuperating after back surgery. Reaching into his government’s deep pockets, he promised $37 billion in new government handouts to civil servants and students.

                      Gregory Gause, a Saudi expert at the University of Vermont, noted that major flooding in Jeddah in January which killed 10 people and caused severe property damage did not provoke mass protests. “If there was ever a time when people would take to the streets, this would have been it,” Gause said. The monarchy benefits, he said, from the fact that its opposition is divided between liberals and religious conservatives and so far remains a largely online phenomena However, last month a group of more than 100 Saudi intellectuals signed a petition for additional reforms, including an elected advisory council. Thousands of Saudis have signed onto Facebook and Twitter accounts calling for mass protests on March 11, the ninth anniversary of a fire in Mecca that killed 15 girls who were prevented from leaving a burning school without their Islamic cloaks.

                      Saudi security forces appear to have suppressed the main recent threat to the regime from al-Qaida, whose founder was Saudi-born. U.S. concerns focus on Saudi succession and preventing disruptions to Saudi oil production. Abdullah is 87 and in poor health; his half brother and crown prince, Sultan, is also an octogenarian and ailing. Third in line is the slightly younger Prince Nayef, the interior minister, who is not popular. The kingdom’s youth resent the stipends doled out to 7,000 Saudi princes and the foreign workers who take both high-paying and menial jobs. Saudi Arabia’s minority Shiite population, which predominates in the Eastern Province where most Saudi oil is produced, faces discrimination and has protested in the past. The Saudi leadership fears contagion from Bahrain, the scene of unprecedented political tumult in recent weeks. The two countries are connected by a 16-mile causeway.

                      Bahrain

                      Bahrain is a major concern for U.S. policymakers because of its sectarian divide and location. Not only is it linked to Saudi Arabia’s Eastern Province, but it is home to the U.S. Fifth Fleet, which guards the Persian Gulf and its precious oil traffic. The fleet also is a buffer between Iran and the region’s fragile sheikhdoms and emirates. From that base, some 3,000 U.S. military officers oversee 30 ships and 30,000 sailors.

                      Bahrain’s ruling al-Khalifa family badly mishandled protests that broke out Feb. 14, allowing masses of demonstrators to assemble in a roundabout called Pearl Square and then sending in troops to fire on sleeping protesters. The show of force drew worldwide condemnation and the regime has since made a series of concessions, freeing political prisoners, calling for dialogue, dismissing a few cabinet ministers, allowing a once-banned opposition leader to return from exile and permitting demonstrators to refill Pearl Square.

                      These gestures have not appeased the protesters. Shiite Muslims make up about 70 percent of the island state’s half million citizens and are demanding parliamentary reforms and an end to discrimination in employment, education and housing. Calls to overturn the Sunni Khalifas—or at least restore a more democratic, single-chamber parliament, which briefly existed in the 1970s—are growing. Saudi analyst Gregory Gause said King Hamad is “caught between his population and his family” which holds virtually all key government offices, including that of prime minister; Hamad’s uncle has been in that position since Bahrain’s independence from Britain 40 years ago. Given Bahrain’s sectarian divide and Iran’s proximity, Saudi Arabia and the U.S. worry about Iranian encroachment although so far Bahraini protesters have emphasized their nationalism by wrapping themselves literally in Bahraini flags.

                      Iran

                      Iranian officials from Supreme Leader Ali Khamenei to President Mahmoud Ahmadinejad and government-appointed leaders of Friday prayers have been crowing that Arab demonstrators are following a script written 32 years ago in Iran. Certainly, Tehran has enjoyed seeing the toppling of secular, U.S.-backed dictators but there is no indication that the protesters were motivated by a desire for Iranian-style theocracy. In fact, the uprisings have been marked by the absence of slogans such as “Islam is the Solution” and that old Iranian favorite, “Death to America.”  On Feb. 14 and Feb. 20, protests boomeranged back to Iran as the Green Movement that erupted following disputed June 2009 presidential elections returned to the streets of major Iranian cities. Tehran in recent days has resembled an armed camp as more demonstrations erupt.

                      Mehdi Khalaji, an Iran analyst at The Washington Institute for Near East Policy, said that if the Arab revolts had taken place before Iran’s post-election crisis, “Iran could have used it in the framework of its propaganda.” Now, Khalaji said, such claims look hypocritical, even laughable. In the short term, Iran may benefit from the distraction of Western policymakers. Since Jan.1, the regime has executed 120 prisoners, according to the International Campaign for Human Rights in Iran, giving Iran the dubious distinction of executing more people per capita than any other nation. While global media attention was focused on Libya, Iranian authorities on Feb. 24 arrested two opposition leaders and their wives.

                      Disruption of oil production in Libya and general uncertainty in the region have boosted oil prices and Iran’s revenues. Prospects for an attack on Iran’s nuclear program by either Israel or the United States have decreased as those countries focus on the instability among once-trusted Arab allies.

                      However, in the longer term, the Iranian regime faces major challenges. New heroes are emerging in the Arab world, supplanting Ahmadinejad, Khamenei and Lebanese protégé Hassan Nasrallah, the leader of Hezbollah. A more democratic Egypt may earn it a bigger diplomatic role, diminishing Iranian influence in Iraq, Lebanon and the Persian Gulf. In the interim, Turkey—a prosperous democratic state with diplomatic ties to all its neighbors—is a far more attractive regional model than Iran. The Iranian government must also content with a young, Internet-savvy generation, international economic sanctions, and cyber-warfare attacks on its nuclear program.

                      Israel

                      Israel can take comfort in the fact that for once, protests in the Arab world have had nothing to do with Israel, the Palestinians or Lebanon. Nevertheless, Israelis worry that successor governments in Egypt and elsewhere may be less accommodating to their actions against Arabs. A future Egyptian president will not “sit on the sidelines” if Israel decides to attack Gaza or Lebanon again, Riedel said. “The Egyptians are not going to be as passive.  This is going to be the major source of friction between Cairo and Washington.”

                      There is also the question of what impact the unrest will have on Palestinian governments in both the West Bank and Gaza. Palestinian President Mahmoud Abbas has promised new elections and efforts to reunify with Hamas, which seized control of Gaza in 2007. Successors to Abbas and to Palestinian Prime Minister Salam Fayyad may be less willing and capable of reaching a bargain with Israel.

                      The Obama administration said it remains determined to push for an Israeli-Palestinian settlement. Dennis Ross, the top White House official in charge of Middle East policy, recently said that the lesson Israel should draw from the fall of Mubarak is “the danger of getting stuck in an unsustainable status quo.” The Palestinians’ higher birth rate, the need to give new Arab leaders a stake in peace, and the increasingly sophisticated arsenals of Hamas and Hezbollah all argue for reaching a settlement with the Palestinians sooner rather than later, Ross said. However, Israeli Prime Minister Benjamin Netanyahu, already risk averse when it comes to making concessions for peace, is likely to become even more so as he waits to see what kind of government emerges in Egypt and whether any other pro-Western Arab dominos—such as Jordan—will fall. U.S. domestic politics may make it less likely that President Obama will pressure Netanyahu to give up more land for peace. One possibility is that Netanyahu might instead explore a settlement with Syria that could undercut Iranian influence and the possibility of a new Israeli confrontation with Hezbollah.

                      Libya

                      Libya is important to the United States because it is a major oil supplier to Europe, and like Egypt and Saudi Arabia, has both spawned and confronted numerous members of al-Qaida. A major U.S. concern is that Islamic fundamentalists will fill the vacuum left by Moammar Gadhafi’s brutal regime.

                      During his 41-year rule, Gadhafi prevented the creation of political parties. He staged phony “people’s congresses” while dictating policy behind the scenes and parceling out plum positions and business opportunities to members of his family and tribe. Whenever he sensed a threat, he reshuffled officials, leading one Libyan a decade ago to compare his countrymen to “mice in a bag” that Gadhafi would shake periodically to pre-empt opposition from organizing. Despite their lack of experience in politics or civil society institutions, Libyans in the eastern part of the country first liberated from Gadhafi’s rule are already putting together provisional governments. A pool of talented Libyans including returning exiles should be able to form a credible new administration. However, the transition is Libya has already been bloodier than in neighboring countries and there is a prospect of civil warfare between tribes and regions. Al-Qaida would likely take advantage of such chaos. Still, it is hard to imagine that Gadhafi’s successors will be worse stewards of Libyan interests or more menacing to the world at large than he has been.

                      Barbara Slavin has reported on the Middle East for more than three decades, and is the author of the 2007 book Bitter Friends, Bosom Enemies: Iran, the US and the Twisted Path to Confrontation.

                       Reprinted by Permission © 2011, The Center for Public Integrity®. All Rights Reserved.

                      Today March 4th – Last Day for Significant Early Registration Discount(s) for 11th eDiscovery Summit April 27-29th in San Francisco, CA

                      As Electronically Stored Information continues to proliferate and courts and investigators demand more from businesses, pressure to cut costs are just not going away.

                      The 11th eDiscovery conference April 27-29th in San Francisco, CA will provide strategies for ediscovery professionals to minimize costs, risks and challenges with ediscovery, and include:

                      • Organize an effective records program by tapping into existing resources
                      • Determine judges’ priorities when eDiscovery conflicts arise
                      • Align the interests of IT, in-house and outside counsel
                      • Handle eDiscovery via social media sites and other new sources of ESI
                      • Address the tension between preservation and effective data lifecycle management
                      • Control the cost of review while maintaining defensibility
                      • Save money by employing
                      • Early Case Assessment tools and new technologies
                      • Compare the Federal rules regarding ESI versus international laws and regulations
                      • Explore how the states have emulated Federal rules and how they differ

                      Early Bird Discount – Register and pay by March 4th 2011 and save $400 to $1,247 off on conference registration(s). Click Here for More Information and to Register.

                      5 Ways to Focus a Law Firm Marketing Strategy

                      Recent  National Law Review Business of Law Guest Blogger Margaret Grisdela of Legal Expert Connections provides some quick tips on how to focus a law firm’s marketing strategy: 

                      Clearly targeting law firm clients is one of the key concepts of the Courting Your Clients legal marketing methodology. You will lower marketing costs, increase response rates, and build greater brand visibility with a narrowly defined market niche. Here are 5 ways to focus your law firm marketing strategy:

                      1. Geographically.

                      The majority of small to mid-sized law firms simply focus on developing new business located within a 50 to 100 mile radius of an office location. Proximity gives you the benefit of convenient face-to-face meeting opportunities, personal networking, and strong local referral sources.

                      2. Demographically.

                      Attorneys who serve a consumer audience in particular (like family law, trusts and estates, or immigration) can focus on known characteristics such as marital status, income, the presence of children, and/or zip codes.

                      3. By Industry.

                      Lawyers who serve a business clientele are likely to target specific industries that are well suited to their practice. Examples include intellectual property attorneys who work in the entertainment field, municipal lawyers who serve county officials, or corporate law firms who favor technology companies.

                      4. By Job Title.

                      A purchasing agent or key decision maker focus – like the HR Director for labor & employment lawyers or the General Counsel for corporate attorneys  – ensures that you target your business development efforts on the person who can sign your engagement letter and check.

                      5. By Trigger Events.

                      Transactional attorneys need to find clients with a highly defined need. This could be a personal injury attorney looking for car accident victims, or a corporate lawyer who helps business owners with mergers and acquisitions.

                      Marketing campaigns will be determined by the focus you bring to your law firm. Of course, there may be multiple parameters that are relevant to your marketing definition, like HR Directors within retail companies located in a specific metropolitan area.

                      Focus not only helps you to invest your marketing budget wisely, but it also enables attorneys and staff to refine their personal business development efforts in a way that aligns with the firm’s strategy.

                      © Legal Expert Connections, Inc.

                      U.S. Supreme Court Adopts "Cat's Paw" Doctrine in Discrimination Cases

                      Posted today at the National Law Review by Bracewell & Giuliani – details of the Staub v. Proctor Hospital decision handed down by the Supreme Court earlier this week: 

                      Employers may be liable for discrimination even though the final decision maker had no discriminatory intent

                      On March 1, 2011, the U.S. Supreme Court issued its much anticipated decision inStaub v. Proctor Hospital, addressing for the first time the “cat’s paw” doctrine of employer liability in discrimination cases. Under the cat’s paw doctrine, an employee seeks to hold his employer liable based on the discriminatory intent of a supervisor who was not responsible for making the ultimate employment decision.

                      Facts

                      This case arose under the Uniformed Services Employment and Reemployment Rights Act (USERRA). Staub, an angiography technician for Proctor Hospital, was a member of the Army Reserves, which required him to attend drill one weekend a month and to train full time for two to three weeks a year. Mulally, Staub’s immediate supervisor, and Korenchuk, Mulally’s supervisor, were hostile to Staub’s military obligations. Mulally told one department employee that Staub’s military duty had been a strain on the department and asked the employee to help Mulally “get rid” of Staub. Korenchuk ridiculed Staub’s military service as a waste of time and taxpayer money. In January 2004, Mulally issued Staub a “Corrective Action” disciplinary warning for purportedly violating a rule requiring him to stay in his work area even when he had no patient.  Staub disputed the corrective action claiming there was no such rule and, even if there were, he did not violate it.

                      On April 2, 2004, Day, a co-worker of Staub’s, complained to Buck, the hospital’s vice president of human resources, about Staub’s frequent unavailability and abruptness.  Shortly thereafter, Korenchuk advised Buck that Staub had left his desk without informing a supervisor, in violation of the January Corrective Action – an accusation disputed by Staub. Buck relied on Korenchuk’s accusation and, after reviewing Staub’s personnel file, decided to fire Staub.  The termination notice stated that the decision was based on Staub’s having ignored the directive in the January Corrective Action.  Staub challenged his termination through the hospital grievance process, denying that he had violated the Corrective Action and claiming that Mulally had fabricated the allegations on which the Corrective Action was based out of hostility toward his military obligations.  However, Buck refused to change her final decision.

                      The Supreme Court Held That:

                      • An employer may be liable for discrimination under USERRA, even though the final decision maker had no discriminatory intent, where another supervisor performs an act motivated by anti-military intent that is intended by the supervisor to cause an adverse employment action, and that act is a proximate cause of the ultimate employment action; in other words, the ultimate decision maker relies on the supervisor’s act in making the final employment decision.
                      • Intent and responsibility for the adverse employment action can be attributed to an earlier agent, e.g., Staub’s supervisors, if the adverse action is the intended consequence of the agent’s discriminatory conduct.  As long as the agent intends, for discriminatory reasons, that the adverse action occur, he has the scienter, i.e., knowledge, required for liability under USERRA.
                      • The only way an employer can escape liability for discrimination is if the ultimate decision maker’s investigation results in an adverse action forreasons unrelated to the supervisor’s original biased action.
                      • The supervisor’s biased report may remain a causal factor for the discrimination if the independent investigation takes it into account without determining that the adverse action was, apart from the supervisor’s recommendation, entirely justified.
                      • If the independent investigation relies on facts provided by the biased supervisor – as is necessary in any case of cat’s paw liability – then the employer (either directly or through the ultimate decision maker) will have effectively delegated the fact-finding portion of the investigation to the biased supervisor.

                      What This Means for Employers

                      • An employer will no longer be able to rely on the ultimate decision maker’s independent investigation as a defense to liability for the discriminatory intent of lower level supervisors, unless the employer can identify a reason for the adverse action that is wholly unrelated to the information or reports provided by the lower-level supervisors.
                      • To avoid liability, before making employment decisions based on information/reports from an employee’s supervisors, employers will now need to determine whether the employee claims that his supervisors were discriminating against him on the basis of his protected class and whether the adverse employment action can be justified on some basis other than the information/report from the employee’s supervisor.
                      • The Supreme Court noted that USERRA is similar to Title VII of the Civil Rights Act of 1964.  Accordingly, courts will in all likelihood apply this same analysis to cat’s paw cases under Title VII, the Americans With Disabilities Act, and the Age Discrimination in Employment Act.

                      © 2011 Bracewell & Giuliani LLP


                      Caution: Discussions between Counsel and Client during a Deposition May Not Be Privileged

                      Recently posted at the National Law Review by Sills Cummis & Gross –  conversations during a deposition break appear to be fair game for questioning and are not considered privileged according to a recent case in federal court in New Jersey.  

                      The morning session of the deposition could not have gone better. Defense counsel has not asked too many tough questions and both plaintiff and her counsel are pleased with her answers – except for one. During the lunch break, after discussing their respective plans for the upcoming holiday weekend, plaintiff asks her counsel about one of her answers. She is troubled that, upon reflection, her answer may not have been entirely accurate. Counsel’s immediate response is to assure plaintiff not to worry. His next instinct is to talk through the question and answer with his client to determine whether a clarification is necessary. But, should he? He sees no reason not to do so, as he firmly believes such discussion is within the attorney-client privilege. It is also necessary, not to coach the witness, but to ensure an accurate record. So, counsel and client discuss the answer in detail and determine that plaintiff’s response is, in fact, misleading. Following the lunch break, plaintiff’s counsel interrupts defense counsel’s first question and informs him that plaintiff wishes to amend one of her prior answers. Upon hearing the “new” answer, defense counsel asks plaintiff to describe, in detail, her discussions with her counsel during the lunch break. Plaintiff’s counsel jumps out of his seat, objects and directs his client not to answer on privilege grounds. Does plaintiff have to disclose the subject of her lunchtime conversation with her counsel or is it privileged? In the federal court in New Jersey, such conversations during a deposition break appear to be fair game for questioning and are not considered privileged.

                      This issue recently arose in Chassen v. Fidelity Nat’l Fin., Inc., Civ. Action No. 09-291 (D.N.J. July 21, 2010) (“Letter Order”). There, Magistrate Judge Salas determined that communications between client and counsel during a break in a deposition are not privileged and may be explored during the deposition, unless the discussion involves issues of privilege. According to Magistrate Judge Salas:

                      “Defendants have a right to explore whether the discussions counsel had with the Plaintiff during the recess may have influenced her testimony, thus interfering with the fact-finding goal of the deposition process.” Id. at 2. In a Memorandum and Order filed on January 13, 2011, Judge Sheridan agreed.

                      The Federal Rules of Civil Procedure do not directly address this issue. Fed. R. Civ. Pro. 30(c)(1) provides that deposition testimony should proceed as if it were trial testimony. Thus, the court in Hall v. Clifton Precision, 150 F.R.D. 525 (E.D. Pa. 1993), a case relied upon extensively by Magistrate Judge Salas, found that counsel may not consult with a client at any time after the start of the deposition. “‘During a civil trial, a witness and his … lawyer are not permitted to confer at their pleasure during the witness’s testimony … The same is true at deposition.’” Letter Order, at 1, quoting Hall, 150 F.R.D. at 528.

                      In Chassen, Deborah Hoffman, a proposed class representative, testified at deposition that she would not be available to attend the trial in the matter because of work. As a proposed class representative, Mrs. Hoffman’s availability to appear at the trial was relevant to her suitability to represent the class. A few moments later, the parties took a break so that the videographer could change tapes. When the deposition resumed, defense counsel asked Mrs. Hoffman, “[d]id you discuss your testimony you gave this morning with your lawyers during the break?” She responded, “Yes.” Defense counsel next asked Mrs. Hoffman to describe the discussion, which drew an objection from plaintiff’s counsel and a direction not to answer. During a brief colloquy, plaintiff’s counsel argued that, “[t]here was no question outstanding when we took the break, and counsel is allowed to consult with [a client] during a break in deposition,” under those circumstances. During another colloquy later in the deposition, plaintiff’s counsel admitted that, “I disclosed my mental impressions and opinions about her testimony” during the break. After defense counsel concluded his questioning, plaintiff’s counsel then asked several questions regarding Mrs. Hoffman’s availability to testify at trial. This time, under questioning by her counsel, Mrs. Hoffman testified that she could attend the trial as required.

                      Following the deposition, defense counsel filed an application with Magistrate Judge Salas seeking an order permitting defendants to question Mrs. Hoffman about her discussion with her counsel during the break in the deposition. Magistrate Judge Salas held that “counsel and witness are prohibited from engaging in private, off-the-record conferences during any breaks in a deposition, except for the purpose of deciding whether to assert a privilege.” Letter Order, at 1. If such conferences occur, the attorney taking the deposition is entitled to “inquire about the specific content of those communications to ascertain whether any witness-coaching has occurred.” Id. at 1-2; see also Hall, 150 F.R.D. at 532.

                      In plaintiff’s brief opposing defendants’ application, counsel argued that Hall is not controlling and, in fact, has been subject to much disagreement in other districts. Magistrate Judge Salas rejected plaintiff’s argument, finding that Hall was adopted by the District of New Jersey in Ngai v. Old Navy, Civil Action No. 07-5653, 2009 U.S. Dist. LEXIS 67117 (D.N.J. July 31, 2009). In Ngai, Magistrate Judge Shwartz, relying on Hall, found that text messages exchanged during a deposition between defense counsel and the deponent, who were in different locations, violated Fed. R. Civ. Pro. 30 and were not protected by the attorney-client privilege. Applying Hall, Magistrate Judge Salas held that “Defendants will be permitted to question Mrs. Hoffman about the communications between her and counsel during the break where Mrs. Hoffman admitted she spoke to counsel about her testimony.” Letter Order, at 2.

                      Plaintiff appealed the decision to Judge Sheridan who focused on two competing issues: (1) “whether the attorney impermissibly ‘coached’ Ms. Hoffman skewing the truthfulness of her testimony”; and (2) “whether such an attorney-client communication is privileged, and should remain confidential despite the coaching (if any).” Memorandum/Order at 1. In attempting to resolve these potentially conflicting positions, Judge Sheridan offered to hold an in camera hearing with plaintiff and her counsel to determine whether the discussions during the deposition were protected by the attorney-client privilege. After both parties rejected this suggestion, Judge Sheridan affirmed Magistrate Judge Salas’s decision and ordered Mrs. Hoffman to be deposed regarding her intra-deposition discussion with her counsel.

                      Unlike the Federal Rules of Civil Procedure, the New Jersey Court Rules directly address this issue, at least in part. The Court Rules expressly forbid a lawyer from consulting with a client “during the course of the deposition while testimony is being taken” except with regard to issues involving (a) privilege; (b) confidentiality; or (c) a limitation created by a previous order of the court. R. 4:14-3(f). There is some debate, however, as to the scope of the phrase “while testimony is being taken” and whether it is intended to extend the prohibition to breaks during the deposition. The comment to the Court Rule takes the position that the Rule applies only in the deposition room and “clearly does not address consultation during overnight, lunch, and other breaks.” Id., comment 6. However, in In re PSE&G Shareholder Lit., 320 N.J. Super. 112, 116-118 (Ch. Div. 1998), the court, after citing to the comment to the Rule, nevertheless imposed an order prohibiting consultation between lawyers and clients during deposition breaks.

                      In practice, an attorney defending a deposition needs to be aware that any discussions he/she has with a client during a break may not be privileged. Both the Chassen decision and R. 4:14-3(f) permit counsel to discuss with a client during a deposition issues pertaining to privilege (i.e., whether particular questions implicate privileged communications). However, a witness may be required to testify regarding any other substantive discussions with counsel during a break in the deposition. This is particularly true in cases pending in New Jersey federal court in light of the Chassen decision. Following Chassen, attorneys who discuss substantive matters with a client during a deposition break does so at their peril.

                      This Alert has been prepared by Sills Cummis & Gross P.C. for informational purposes only and does not constitute advertising or solicitation and should not be used or taken as legal advice. Those seeking legal advice should contact a member of the Firm or legal counsel licensed in their state. Transmission of this information is not intended to create, and receipt does not constitute, an attorney-client relationship. Confidential information should not be sent to Sills Cummis & Gross without first communicating directly with a member of the Firm about establishing an attorney-client relationship.

                      © Copyright 2011 Sills Cummis & Gross P.C.

                       

                      April 8-10 the First Annual Young Professionals in Energy International Summit takes place in Las Vegas, Nevada

                      Young Professionals in Energy (“YPE”) is the first and only interdisciplinary networking and volunteer organization for people in the global energy industry – a place where bankers can connect with engineers, accountants with geologists and so on.  Their mission is to provide a forum for knowledge sharing and camaraderie among future leaders of the energy industry. This April 8-10, the first annual YPE International Summit takes place in Las Vegas, Nevada at the Tropicana Hotel, bringing together over 10,000 members and over 40 chapters for the energy’s industry’s biggest networking event of the year.  

                      The Young Professionals in Energy International Summit has been approved by the Nevada Board of Continuing Legal Education for 6.0 credits Continuing Legal Education  Attorneys and judges who attend this activity may claim up to the maximum credits indicated based on actual attendance at the event, to be held April 8-10, 2011 .

                      March 1st is the last day to save $50 on registration! For more information and to register – please click here: