According to Advisen’s Loss Insight Database, the annual total of derivative shareholder action filings has declined every year since 2011, a year that saw the second highest annual total in the past ten years. In fact, the 2014 annual total of 160 filings in the United States is significantly below the 10-year average of 233.
The average settlement value of derivative shareholder actions, however, has trended in the opposite direction since 2012 increasing from $1.2 million to $7.2 million.
Advisen defines derivative shareholder actions as cases against directors and officers brought by shareholders on behalf of the company.
It was noted in the Quarterly D&O Claims Trends: 2014 End of Year Wrap-up that there appears to be a trend of increasing frequency of severe shareholder derivative settlements over the past five to six years. Below is a list of the top U.S. derivative actions since 1999 according to the Advisen Loss Insight.
The probability of a derivative action loss in excess of $100 million, however, still remains very low as demonstrated in the chart below.
Josh is an Editor at Advisen in the Research & Editorial division. He is the lead editor responsible for several of Advisen’s Front Page News editions and he also originates custom research on behalf of Advisen’s largest insurance company clients. Contact Josh at [email protected].
