Monthly Archives July 2021

As the late singer Prince said, eternity is a very long time. While his 1984 track “Let’s Go Crazy” does not deal with tort claims, a Supreme Court of Canada decision released on Friday should reiterate the importance of the word “forever” in release agreements settling lawsuits. amicably.

“A general release, if interpreted literally, could prevent the author of the release from prosecuting the released person for any reason, forever,” Justice Malcolm Rowe wrote for the Supreme Court of Canada in Corner Brook (Town) v. Bailey.

the Local stream The case arose when city worker David Temple was struck by a vehicle on March 3, 2009 in Corner Brook, Newfoundland. At the time, Temple was doing roadworks. The vehicle was driven by Mary Bailey and was owned by her husband, Gerald Bailey.

Mary Bailey filed a lawsuit against the town of Corner Brook for injuries she sustained in the 2009 accident. Bailey settled her lawsuit with the town out of court in 2011 for $ 7,500. In exchange for the $ 7,500, Mary Bailey signed a press release of nearly 600 words; this prevented him from filing claims “of any kind” against the city.

Meanwhile, Temple filed a lawsuit against the Baileys. Claims that a party is at fault have not been proven in court.

In 2016, the Baileys’ insurer issued a third party notice against the Town of Corner Brook. The insurer maintains that the city is responsible for the damage caused to Temple. In the alternative, the Bailey’s insurer claims that if the Bailey’s were responsible, they are entitled to a contribution from the city.

For its part, the city argued that the release – which settled Mary Bailey’s personal injury claim against the city for $ 7,500 – prevented the Baileys from filing their third party claim against the city. The Supreme Court of Canada ruled in favor of the municipality in its decision rendered on July 23, 2021.

“The disclaimer takes the risk of forfeiting the value of any claims it might have had, and the disclaimer pays for the guarantee that none of these claims will be presented.” The uncertainty or risk that is attributed to the liberator is precisely what the released person pays, ”Justice Rowe wrote of the release agreements for the Supreme Court of Canada in Local stream.

The High Court decision reinstates a 2018 decision of the Supreme Court of Newfoundland and Labrador and overturns a 2020 decision of the Court of Appeal of Newfoundland and Labrador.

The press release Bailey signed with the city includes “all actions, lawsuits, causes of action.” . . planned or unplanned. . . and claims of any kind arising out of or relating to the accident which occurred on or about March 3, 2009, ”Judge Rowe wrote for the court in his unanimous decision.

“If this formulation [of the release] is considered insufficient to include a claim resulting from the accident, it is difficult to imagine which wording would be sufficient, apart from listing each conceivable type of claim one by one (third party claims, cross claims, counterclaims, subrogated claims, equity and common law claims, statutory claims, etc.). There is no policy reason to require the parties to clarify the scope of release in this manner. “

Initially in 2018, Justice George Murphy of the Supreme Court of Newfoundland and Labrador dismissed the third party claim filed by the Baileys’ insurer against the town of Corner Brook. The move stems from the 2011 liberation agreement between the city and Mary Bailey.

Justice Murphy’s decision was overturned by the Newfoundland and Labrador Court of Appeal in a decision released on February 4, 2020. Had the appeal court’s decision been upheld, it would have paved the way for the insurer’s claim against the city.

Writing in 2020 for the Newfoundland and Labrador Court of Appeal, Justice Gillian Butler explained that the 2011 release agreement focused on the Bailey’s own claims against the town of Corner Brook; he does not contemplate the losses unrelated to the damage suffered by the Baileys. The appellate court concluded that Murphy J. erred in concluding that the city, in drafting the release agreement, was contemplating something “not determinative of mutual intent.”

But the appeal court’s finding is a distortion of what Justice Murphy originally wrote in 2018 for the Supreme Court of Newfoundland and Labrador, Justice Rowe wrote for the Supreme Court of Canada. Instead, Judge Murphy “explicitly examines what was contemplated by both parties,” Judge Rowe wrote.

Judge Murphy “explains that the Baileys could have negotiated the terms of release, but they chose not to,” Judge Rowe wrote.

Instead, Judge Murphy concluded that what Mary Bailey and the city envisaged, in agreeing to the settlement, was that Bailey “could no longer bring any claims or claims against the city relating to the accident.”

Judge Murphy therefore rendered his decision based on his review of the circumstances surrounding the release agreement, the Supreme Court of Canada argued.

“Even if [the Baileys and the city] may not have explicitly considered the possibility of a particular third party claim, it was their mutual and objective intention to cover such a claim as part of the discharge. This decision is a factual application of the principles of contractual interpretation, and it was [by a hi9gher court]Wrote Justice Rowe.

Bailey’s release with the city reads:

“Renunciators, in their name and in the name of their heirs, dependents, executors, administrators, successors, assigns and legal and personal representatives, release and discharge forever the waivers their servants, agents, officers, administrators, directors , employees, their partners, affiliated and subsidiary legal entities and their legal successors and beneficiaries both jointly and individually, of all actions, lawsuits, causes of action, debts, contributions, accounts, benefits, obligations, commitments, contracts, costs, claims and demands whatever they may be, including all claims for compensation, loss of use, loss of time, loss of wages, expenses, disability, past, present or future, and any aggravation, foreseen or unforeseen, as well as for currently undisclosed injuries and all claims and claims of any kind or nature whatsoever arising out of or related to the accident which occurred on or around March 3, 2009, and without limiting the generality of the foregoing, of all the claims raised or which could have been raised in the action entitled 2011 04G 0062, between MARY BAILEY, as first plaintiff, GERALD BAILEY, as second plaintiff, and THE CORNER BROOK CITY COUNCIL as defendant, which was brought in the Supreme Court of Newfoundland and Labrador, Trial Division (General) (the “Action”), including, but not limited to, claims for:

• • special damages to be proved at trial, including material damage to the motor vehicle of the first claimant and the second claimant;
  • general damages to be proved at trial;
  • the costs of this action, including the cost of the discoveries;
  • interest before and after judgment;
  • any other remedy that this Honorable Court may deem just.

AND for the aforementioned consideration, the renunciators on their behalf and on behalf of their heirs, dependents, executors, administrators, successors, assigns and legal and personal representatives hereby undertake, agree and undertake to indemnify and to release from any liability and to keep indemnified the renunciators, their servants, agents, officers, directors, managers, employees, their associates, affiliates and legal entities and their legal successors and assigns, jointly and individually, from any other claim, claim, action or suit that may be brought by or on behalf of or on behalf of the Releasees against the Releasees, their servants, agents, officers, directors, managers, employees, their associated, affiliated and legal entities and their legal successors, jointly or individually , for and with respect to any of the matters or things set out above ;

AND for the aforementioned consideration, the Releasees further agree not to make any claim or take legal action against any other person, company or entity that may claim a contribution, indemnity or other compensation against the Releasees, their servants, agents. , officers, directors, managers, employees, their associated, affiliated and legal entities and their legal successors and assigns, jointly or individually, under the provisions of any applicable law or in equity with respect to any causes, matters or things disclosed by virtue of the present ;

AND the waivers hereby declare that at all times in relation to these presents, they have been represented by a legal advisor of their choice who has advised them regarding this waiver and that they fully understand the terms of this waiver, and that by executing this waiver they have done so in full knowledge of all the rights they may have against the waivers and the issues raised in the action, and that the aforementioned consideration is voluntarily accepted by them in order to make a compromise, full and final adjustment and resolution of all claims, causes, issues and things posted below.

Feature image via iStock.com/David Purchase

What is the SMCR?

SMCR has been introduced in stages since 2016 for banks, insurers and other persons authorized by the FSMA. It aims to reduce damage to consumers and strengthen market integrity by changing behavior and culture within companies. Gradually applicable to staff at different levels, SMCR fosters a culture in which staff at most levels take personal responsibility for their actions and ensures that companies and staff clearly understand and can demonstrate where responsibility lies at the core. within the organization. When something goes wrong, this in turn allows the regulator to identify individual guilt (and take action if necessary).

Why is this happening?

The UK Treasury notes that MFIs have operated effectively under recent crisis conditions. However, it is concerned that the existing regulatory regimes for MFIs provide only very limited provisions for the monitoring of individual behavior within such entities, as most of the supervisory and enforcement powers are focused on the institution. ‘legal entity. To fill this gap, the Treasury intends to set up a SMCR for MFIs.

It is not a development that comes out of nowhere. In the July 2019 Financial Stability Report, the BoE’s Financial Policy Committee noted that there was a strong case for extending the SMCR to MFIs, stating that “the governance arrangements and culture of the risk of MFIs should fully reflect the vital services they provide to financial institutions. system and economy ”. The Treasury Select Committee made the same recommendation in its 2019 report on IT failures in the financial services industry. The Committee noted the potential impact on clients of an operational incident at an MFI, stating that it is “essential that senior management of MFI companies be responsible for managing operational incidents. There does not seem to be any justification for keeping the IMF out of the senior management regime ”.

The Treasury has also taken into consideration the positive feedback from the PRA and FCA reviews of their existing SMCR plans.

By introducing a SMCR for MFIs, the Treasury aims to:

• encourage effective governance within MFIs;
• encourage good behavior;
• require MFI employees to exercise adequate oversight over the areas for which they are responsible;
• encourage MFI employees to identify accountability gaps within the MFI and address them appropriately; and
• improve risk management in MFIs, and hence their security and soundness, thereby supporting financial stability in the UK.

Which companies will the SMCR apply to?

The Treasury explains that in practice, the MFIs concerned are:

• central counterparties (CCPs);
• central securities depositories (CSDs); and
• payment systems recognized under the Banking Law of 2009 (recognized payment systems) and service providers specified for these recognized payment systems. When recognized payments are integrated into a CCP or CSD, provision is made for the SMCR to be applied at the level of the CCP or CSD.

What is the SMCR framework?

The SMCR for MFIs would replicate the existing SMCR in Part 5 of the Financial Services and Markets Act 2000 – except that the BoE would be given new powers to implement, supervise and enforce the regime.
The diet will include:

• a “Senior Managers Regime” under which the BoE has the power to determine whether persons performing functions that present a potential risk to financial stability or to the continued operation of the MFI (“Senior Management Functions”) have the skills, expertise and probity in carrying out their duties. It would require companies to submit documents to the BoE on the scope of these persons’ responsibilities (a “Statement of Responsibilities”) and establish a legal obligation for senior managers to take reasonable steps to prevent and / or stop infringements. regulatory matters in their fields. responsibility;
• a “certification regime” which would require companies to certify as fit and appropriate any person who performs a “specified function” that could cause significant harm to the MFI or its users (“significant harm functions”), both upon recruitment and annually thereafter; and
• “Rules of Conduct” for all employees, which set high-level minimum requirements for the conduct of individuals when necessary or expedient to advance the BoE’s goal of financial stability.

Further, the Treasury explains the extension of the disciplinary powers of the BoE under the SMCR and that the BoE would have the power to issue restraining orders if it appears to the BoE that an individual is not a person. suitable and appropriate to perform a function in relation to an activity carried out by an MFI.

Next steps

The Treasury is seeking advice on its general intention to create a SMCR for MFIs, as well as how the SMCR can be applied appropriately and proportionately to MFIs.

The government intends to legislate for the new SMCR regime when parliamentary time permits. Under the new regime, the BoE would be given new rule-making powers to implement the regime. The BoE will consult on these new rules before they come into force.

WASHINGTON: Senators Mark Warner, D-VA, Marco Rubio, R-Fla., And Susan Collins, R-ME, today unveiled a bill that will require federal agencies, many government contractors and homeowners and operators of critical infrastructure to report within 24 hours of the discovery of any IT incident “which constitutes a threat to national security”.

One of the objectives of the bill is to “allow the development of a common operational image of cyberthreats at the national level”, according to a project shared with Breaking Defense on Tuesday evening.

The bill, titled Cyber ​​Incident Notification Act of 2021, marks a major milestone in an attempt to address a challenge long recognized by Congress, the U.S. government, and many in the private sector: a sharing deficit. Cyber ​​information hampers the government’s ability to respond. major cyber incidents.

Lack of timely information also affects the ability of federal agencies, businesses, and other relevant entities to quickly educate themselves and adapt cyber defenses to real-time and ongoing cyber incidents, such as the Microsoft Exchange plus cyber espionage campaign. early this year that affected some 140,000 United States. entities. The US government, along with a broad coalition of allies and partners, officially attributed the campaign to China on Monday.

“It seems like every day Americans are waking up to the news of another ransomware attack or cyber intrusion,” said Warner, chairman of the Senate Special Committee on Intelligence and one of the co-sponsors. of the bill, in a press release. “We shouldn’t rely on self-declaration to protect our critical infrastructure. We need a routine federal standard so that when vital sectors of our economy are affected by a breach, all federal government resources can be mobilized to respond and avoid its impact. “

Warner’s comments about the insufficiency of “voluntary reporting” echo the sentiments he has been expressing for months, including allusions to this bill.

Currently, there is no federal law requiring the reporting of cyber incidents to the federal government. Some states have data breach notification laws, but the requirements of those laws often revolve around the theft of consumer financial data or personally identifiable information (PII), such as social security numbers, and notifications. are sent to the affected consumers.

Existing data breach notification laws do not apply to incidents such as the SolarWinds cyberespionage campaign or the Colonial Pipeline ransomware attack, despite the national security implications they revealed.

The need for mandatory reporting focused on SolarWinds, which was voluntarily flagged by cybersecurity firm FireEye following the discovery of the campaign after nine months of investigation, and Colonial Pipeline, during which the CISA acting director Brandon Wales told Congress his agency was not receiving the technical information it needed to communicate and respond.

The legislation enjoys broad bipartisan support, including from Intelligence Committee member Collins, who introduced an information-sharing bill in 2012 that failed to gain traction. Collins called the bill “common sense and long overdue.”

“Having a clear vision of the dangers facing the nation in the face of cyber attacks is necessary to prioritize and act to mitigate and reduce the threat,” Collins said in the press release. “Failure to put in place a strong cyber incident notification requirement will only give our adversaries more opportunities to gather intelligence about our government, steal intellectual property from our businesses and harm our critical infrastructure. . “

The bill requires federal agencies and critical infrastructure owners and operators – as well as government contractors and subcontractors, excluding those providing housekeeping and custody services or non-computer products or services below micro-purchase threshold – to report cyber incidents to Homeland Security’s Cybersecurity and Infrastructure Agency (CISA) within 24 hours of discovery.

He calls on CISA “to establish cyber intrusion reporting capabilities to facilitate the submission of timely, secure and confidential cybersecurity notifications.”

The bill also addresses several long-standing concerns of private entities by offering “limited immunity” to reporting companies and requiring the CISA to implement data security to protect personal information and confidentiality.

In particular, the law would exempt notifications of computer incidents from the Freedom of information act. The law would also prohibit notifications from being used as evidence in any civil or criminal case against the reporting entity or from being the subject of subpoenas, except for legal actions brought by the federal government or the courts. subpoenas from Congress for surveillance, respectively.

The bill’s introduction follows recent Senate confirmations from National Cyber ​​Security Director Chris Inglis and CISA Director Jen Easterly, both of whom have roles that will be critical in coordinating national cyber defense. in response to future incidents.

Rubio, vice chairman of the Intel committee and one of the bill’s co-sponsors, said cyber attacks were “out of hand” and the government must take “decisive action”. He added that all US organizations should “act immediately” once an attack is discovered.

“The longer an attack goes unreported, the more damage can be done,” Rubio said in the press release. “Ensuring prompt notification will help protect the health and safety of countless Americans and help our government locate those responsible. “