LITIGATION UNLEASHED - Stikeman Elliott

4.4 Establishing defences
Proper compliance with disclosure obligations will not necessarily prevent the initiation of
litigation, but demonstrated and clearly documented compliance procedures, if complied with,
are likely to go a long way towards establishing the defences discussed above.
4.5 Responding to a formal or informal threat of litigation
In the face of a formal or informal threat of litigation, it is imperative that immediate steps be
taken to ensure that the appropriate response is prepared and that, where appropriate, remedial
or protective steps are taken.
The immediate next steps which we recommend in the face of any threat of litigation
are as follows:
• Notify the whole board of directors of the claim asserted;
• Review the risk management issues and make timely notification to liability insurers
(for issuer, directors and officers);
• Consider whether a press release and/or material change report are appropriate
or required;
• Consider whether any regulatory compliance requirement is triggered;
• Ensure that documents which may be relevant are collected and not destroyed
(despite the company’s document retention policy, if any);
• Notify outside counsel where appropriate to obtain objective advice regarding
immediate steps; and
• Assess whether separate counsel are required for some or all defendants.
STIKEMAN ELLIOTT LLP
LITIGATION UNLEASHED
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