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Publications

  • NJ Supreme Court Upholds Insurer’s Right to Rescind When Professional Liability Insurance Is Procured by Fraud

    Right to Nullify Insurance Policy Procured by Fraud

    December 9, 2015

    A recent decision by the New Jersey Supreme Court voided an Appellate Division ruling that would have effectively decimated the right to nullify an insurance policy procured by fraud in the face of a statute or court rule mandating the need for liability insurance. 

  • FC&S Legal “Eye on the Experts” Publishes Thomas Quinn on UM/UIM Matters and NJ’s “Fairly Debatable” Bad Faith Standard

    FC&S Legal: The Insurance Coverage Law Information Center

    March 24, 2015

  • NJ Supreme Court Issues Companion Decisions That Impact Insurers’ Handling of UM/UIM Matters and Address New Jersey’s “Fairly Debatable” Bad Faith Standard

    NJ Supreme Court Impacts Insurers’ UM/UIM Matters

    March 2, 2015

    The companion decisions in two recent New Jersey Supreme Court cases are favorable to insurance companies on the standard for bad faith and the difficulties that policyholders have in proving bad faith in New Jersey under the “fairly debatable” standard. However, one of the cases puts forth the suggestion that the Civil Practice Rules Committee consider three significant rule changes that could have an adverse impact on auto insurers.

  • New Jersey Court of Appeals: Discovery Related to Bad Faith Claims Should Be Stayed Pending Resolution of Insurance Claims for UM/UIM Benefits

    Proof of Coverage Must Precede Related Bad Faith Claims

    December 18, 2013

    An intermediate New Jersey appeals court recently held that discovery with respect to a claim of bad faith against an insurer before the plaintiff has proven his or her case for coverage may “jeopardize the insurer’s defense of [an uninsured motorist or underinsured motorist claim] by disclosure of potentially privileged materials.” 

  • Out-of-Court Statements Made by Attorneys Are Subject to a Lesser Standard for Defamation

    Florida Expands Lawyers’ Liability for Defamation

    March 21, 2013

    The Florida Supreme Court has held that attorneys no longer have absolute immunity for statements made to witnesses while investigating a case, and now enjoy only a “qualified” privilege. 

  • New Jersey Order Reduces Time Period Insurers Have to Respond to Sandy-Related Claims Complaints

    NJ Expedites Insurers’ Response to Sandy Complaints

    February 12, 2013

    Order No. A13-104, which applies to consumer complaints based on Superstorm Sandy–related claims only, reduces from 15 to 5 working days the time period in which insurers must provide the NJ Department of Banking and Insurance with a complete and accurate written response based on available information.

  • Tri-State Area Boosts Efforts on Behalf of Disaster Victims

    Update on Tri-State Superstorm Sandy Initiatives

    January 24, 2013

    While all three governors of the hardest-hit states praised the U.S. House of Representatives for passage of the Disaster Relief Appropriations bill, New York granted a fifth extension of the moratorium on certain insurance law provisions for some areas and the New Jersey Assembly Committee approved a bill that, if passed by the New Jersey Legislature, would require insurers to provide homeowners with a one-page summary explaining the terms of their homeowners’ policy.

  • New York Department of Financial Services Issues a Fourth Amended Order, Extending Moratorium until January 16, 2013

    Superstorm Sandy Update

    January 8, 2013

    The New York Department of Financial Services has issued a Fourth Amended Order, extending its moratorium on the enforcement of certain insurance law provisions until January 16, 2013.

  • Superstorm Sandy: NJ Bulletin Warns Public Adjusters on Reasonable Fees; NY Continues Moratorium on Certain Insurance Law Provisions; US House of Representatives Declines to Vote on $60 Billion in Disaster Aid

    Update on NY/NJ Superstorm Sandy Actions

    January 3, 2013

    The New Jersey Department of Banking and Insurance has cautioned public adjusters to keep their fees reasonable and in line with industry practice. The New York Department of Financial Services has extended its moratorium on certain insurance law provisions until January 6, 2013. The United States House of Representatives declined to vote on a $60 Billion Disaster Aid Bill, delaying its consideration until next congressional session.

  • Governors of Three States Relax the Rules to Save the Day

    Tri-State Area Responds to Sandy with Consumer Friendly Strategy

    December 12, 2012

    Time delays and red tape are turning into the newest threats for tri-state residents whose lives have already been devastated by Superstorm Sandy. The governors and insurance departments of New York, New Jersey and Connecticut have taken similar yet independent actions to facilitate relief, and the three are united in a pledge to secure much-needed federal aid.

  • Sandy’s Perilous Aftermath

    Hurricane Sandy

    November 1, 2012

    As businesses and families that were caught in the path of Hurricane Sandy begin to survey the damage, insurers are feeling the first surge of many claims to come. Now’s the time to confer with Wilson Elser’s knowledgeable and adept insurance attorneys to be certain you’ve got all contingencies covered.

    This is the first in a series of alerts designed to provide you with clarity and understanding of the important and significant issues raised by this unprecedented crisis.

  • Philadelphia Insurance Companies Publishes Article by Quinn and Young

    May 25, 2012

    Philadelphia Insurance Companies publishes article about why employed lawyers need insurance coverage by Thomas Quinn and Steven Young.

  • New NJ Supreme Court Rulings May Alter Duty to Defend

    June 2011

    On June 21, 2011, the New Jersey Supreme Court again issued companion insurance coverage decisions that will have a profound impact upon the duty to defend under New Jersey law: Passaic Valley Sewerage Commissioners v. St. Paul Fire & Marine Insurance Company, 2011 N.J. LEXIS 686 (June 21, 2011) (PVSC) and Abouzaid v. Mansard Gardens Associates, LLC, 2011 N.J. LEXIS 684 (June 21, 2011) (Abouzaid).
  • CPA Portability: Important Changes to California's Licensing Requirements

    January 2011

    On January 1, 2011, the exception to state licensing requirements for "temporary and incidental" accounting practice within the Golden State was eliminated. Practice Privilege Notifications, with the attendant fees, must now be filed with the California Board of Accountancy (CBA) for services within California that are "temporary and incidental" to serving an out-of-state client.

  • "Nonsigning" Tax Return Preparers Required to Register with the IRS to Obtain a PTIN

    January 2011

    The IRS had set a deadline of January 1, 2011, for all tax return preparers to register or reregister with the agency to obtain a Preparer Tax Identification Number (PTIN).

  • "Red Flags" Policy Does Not Apply to Accounting Firms

    December 2010

    After considerable debate in the courts and elsewhere, Congress has now clarified that the Federal Trade Commission's "red flags" rule requiring a comprehensive plan and policy to protect the personal information of consumers does not apply to accounting firms and their clients.

  • Highest New York Court Strengthens Limits on Auditor Liability for Corporate Fraud

    October 2010

    On October 21, 2010, New York's highest court, the New York State Court of Appeals, issued an opinion strengthening, and unambiguously reaffirming, the viability of the in pari delicto doctrine in limiting the liability of independent auditors and other outside professionals. The court found that the "adverse interest" exception to the general imputation principles underpinning the in pari delicto doctrine and related federal Wagoner doctrine is particularly narrow in scope under New York law. Generally, the court's clarification of New York law provides that independent auditors may benefit from imputation to a corporation under the two doctrines so long as the agents' actions do not completely deviate from the corporation's interests. The decision is an important clarification of New York law and a clear limit on auditor liability in the context of corporate fraud.

  • Texas Supreme Court Clarifies Law Regarding Auditors' Liability to Third Parties

    September 2010

    The Texas Supreme Court has strengthened defenses available to auditors in suits brought by third parties for negligent misrepresentation and fraud. In Grant Thornton LLP v. Prospect High Income Fund, et al., the court overruled what had been a broader standard for establishing liability in negligent misrepresentations. The ruling also sets new limitations on "holder" claims, wherein investors contend they were put at a disadvantage because they held securities they otherwise would have sold – based on an auditor's report. The decision is good news for accountants, who are potential targets in litigation stemming from the financial failings of their clients.
  • U.S. Supreme Court to review an important securities case that may open the door to fraud suits against service providers

    August 2010

    The U.S. Supreme Court will hear a case that may expose service providers to lawsuits over alleged misstatements in securities prospectuses. The decision's impact could extend beyond the investment management business to others who advise public companies concerning securities offering documents. That group likely would include accountants, attorneys, bankers, financial advisors and consultants.

  • Statement on Auditing Standards – Consideration Of Fraud In A Financial Statement Audit – Slated For Review By The Auditing Standards Board

    January 2010

    The Auditing Standards Board ("ASB") of the American Institute of Certified Public Accountants ("AICPA") will review the exposure draft of the proposed Statement on Auditing Standards ("SAS"), Consideration of Fraud in a Financial Statement Audit, at its January 2010 meeting as part of the continuing Clarity Project.

  • Broad application of in pari delicto defense results in summary judgments for Grant Thornton in Parmalat case

    November 2009

    An old defense to claims brought by clients and former clients has been renewed and given broad application to end litigation against affiliates of the former client’s auditors.  U.S. District Judge for the Southern District of New York Lewis Kaplan ruled, on September 18, 2009, that all claims brought by the plaintiffs, Dr. Enrico Bondi, ("Bondi"), the Extraordinary Commissioner of Parmalat Finanziaria, S.p.A., Parmalat S.p.A., and their affiliates (jointly "Parmalat") in Italian reorganization proceedings, and Parmalat Capital Finance Limited, a subsidiary of Parmalat ("PCFL"), against defendants Grant Thornton International ("GTI") and Grant Thornton LLP ("GT-US") were barred under the in pari delicto defense.

  • Accounting firms must comply with FTC "Red Flags" Rule by November 1, 2009

    October 2009

    The Federal Trade Commission's "Red Flags" Rule is designed to protect personally identifiable information from data thieves.  Among others, the Red Flags Rule applies to any business or individual that provides a product or service for which payment is received after the product or service is delivered.  While many might assume that data protection regulation applies only to hospitals and banks, the broad definition of who is covered by the Red Flags Rule very clearly applies to professional services firms that get paid by their clients after the services are provided, which, of course, includes accounting firms.

  • BDO International escapes liability for mistakes of member firm

    June 2009

    In a case closely watched by the accounting profession, a jury took only one hour to render a verdict in favor of BDO International (now known as BDO Global Coordination B.V.), saving that company, the umbrella organization of the BDO network, from huge vicarious liability for the acts of one of its member firms, BDO Seidman.

  • Inattention to engagement letter details leads to potential exposure for otherwise time-barred claims

    June 2009

    Carefully crafted engagement letters are one of the best risk management tools for accountants.  The use of engagement letters across the broad and growing spectrum of services accountants provide is, however, sometimes uneven.  The result can be disastrous.

  • Vicarious Liability Claims To Proceed To Trial: When Can an International Accounting Organization be Held Liable for the Acts of a Member Firm?

    February 2009

    In a recently issued decision, a federal trial court applied traditional rules of vicarious liability and concluded that issues of fact existed as to whether an international accounting organization might be held liable for the acts of one of its members. Accordingly, a case that could have significant effects on the structure and management of accounting organizations, and potential liability, will now proceed to trial.

  • Long awaited revisions to the education law mean additional obligations and opportunities for the New York accountant

    February 2009

    Governor David A. Paterson signed a bill on January 27, 2009, that imposes significant additional regulations upon accountants practicing in the State of New York. The bill amends the Education Law of New York applicable to the practice of accountancy in the state and becomes law six months from now. The new amendments will impact nearly all who practice within New York and, potentially, open the door for reciprocity with other states.

  • Revised regulations for greater taxpayer protection create additional duties and considerations for accountants

    January 2009

    The Treasury Department and the Internal Revenue Service have issued new regulations providing taxpayers improved safeguards and greater control over their tax return information held by tax return preparers.  These new regulations create additional obligations for tax preparers and continue to impose criminal and civil liability for failure to adhere to those obligations.

  • Indemnification provisions in client engagement letters: Old tool given new life for limiting liability of accountants

    January 2009

    As we have repeatedly advised, carefully tailored engagement letters are of growing importance in reducing accountants' liability exposure.  There are numerous provisions incorporated in an engagement letter, some of which can protect the accountant from liability, both from the client and third parties.  However, until recently, it was unclear if one of the most important contractual provisions would be enforced if placed in an accountant's engagement letter: an indemnification and hold harmless provision.