The Companies Second Amendment Bill 2023 will, if enacted, permit the retrospective extension of the usual three year prescription period applicable to claims against directors under section 77 of the Companies Act, on good cause shown.
Those involved with D & O related insurance should be alert to their and their client’s retrospective risk in placing and underwriting such cover.
The cut-off date for comments on the proposed amendment is 29 January 2024.
This is part of an ongoing trend. Recently prescription was extended in professional negligence claims against attorneys. See Special rules for professional negligence claims against legal practitioners will affect PI insurers | Financial Institutions Legal Snapshot.