For D&O insurers the pattern of multiple civil claims and
regulatory/criminal investigations will be familiar territory. Key
issues will be what senior management knew, and when, in order to
determine whether conduct exclusions will bite and to ascertain
exposure for defence costs. VW's CEO, Martin Winterkorn, has
already resigned and his replacement, Michael Horn, has recently
been called to give testimony before a U.S. Congressional
committee. This is no doubt the beginning of multiple regulatory
investigations in numerous jurisdictions.
It is important to remember that VW is a German company,
governed by German corporate law. Going forward, the market
will be watching carefully to see whether the supervisory board is
moved to bring a breach of fiduciary claim against its management
board, and whether dealings with regulators will be approached in a
similar fashion to Siemens a number of years ago.
