Business Preparedness: A Legal Umbrella to Keep You Protected

Transcription

1 Business Preparedness: A Legal Umbrella to Keep You Protected 16 th World Conference on Disaster Management Simpson Wigle LLP WCDM June 20, 2006: Ver. FINAL Jay N. Rosenblatt Partner Simpson Wigle LLP

2 Who We Are Simpson Wigle LLP: is a business law firm with offices in Hamilton & Burlington Jay Rosenblatt: is a Business & Emergency Law Partner at the Firm, providing counsel & solutions to Business founder of the Golden Horseshoe Venture Forum (

3 Outline Convince you that with ANY Disruption/Disaster: Directors & Sr. Managers are at tremendous personal risk Your Business & all its Resources are also at tremendous risk You SHOULD worry Due Diligence is a legal defence There ARE immediate actions that can be taken that will minimize risk to you & your Business These actions MUST be taken

4 Emerging Trends & Issues E.M. & B.C. Working Together Business Continuity v. Disaster Recovery Low Frequency/High Impact High Frequency/Low Impact Personal Preparedness Employees Regulatory Compliance Outsourcing

5 Who Needs Protection Directors Sr. Management Your Business & its Resources: People Process Products Other resources

6 Legal Issues & Liabilities Contracts Pandemics Negligence C-45 Disruption Disaster Emergency Pandemic Employment OH&SA WS&IB Regulatory Compliance Simpson Wigle LLP Critical Business Functions BUSINESS CONTINUITY

7 NON-Legal & Liabilities Shareholders Employees Supply Chain Management (SCM) Investors/Lenders Reputation Management Competitive Advantage Insurance Profits Exit Strategies (including going Public) New Opportunities

8 Risk & Opportunities Seeds of Wisdom Opportunity is always present in the midst of crisis. Every crisis carries two elements, danger and opportunity. No matter the difficulty of the circumstances, no matter how dangerous the situation... At the heart of each crisis lies a tremendous opportunity. Great Blessings lie ahead for the one who knows the secret of finding the opportunity within each crisis. wisdom from the I-Ching, the ancient book of Chinese wisdom

9 What, Me Worry!? What, me worry!? The nice thing about not planning is that failure comes as a complete surprise and is not preceded by a long period of worry and stress! David Parsons (Sydney Water) & Sir John Harvey-Jones The only thing harder than planning for an emergency, is explaining why you didn t! Anonymous OR Worry a bit now, or worry a lot later! Jay N. Rosenblatt

10 Disaster Disaster: In general, most disaster events are defined by the need for external assistance Anonymous

11 Warnings Ice Storm: /11: 2001 SARS: 2003 N. Am. Power: 2003 Tsunami: 2004 T.O. Blackout: 2005 London Terror: 2005 Katrina: 2005 Avian Flu: 20??

12 Be a Leader! The first Business Continuity Manager was Noah, he had good connections and prior warning...we may not (Margaret G. Smith)

13 Simpson Wigle LLP Business Preparedness: Here s the Problem!

14 Risks Causes of Interruptions (2004) 2005 Interruptions Affecting Businesses Power Outage:59.07% Hardware Failure: 51.04% Natural Disaster: 46.87% Telecom Failure: 41.73% Network Failure: 40.61% Software Failure: 39.97%% KPMG B.C.M. Benchmarking Report: 2005

15 Millions of Dollars per Hour in Lost Revenue Business Preparedness: Costs Retail Insurance Information technology Financial institutions Manufacturing Call location Telecommunications Credit card sales authorization Energy Point of sale Retail brokerage Source: META Group

16 Costs In recent years, disasters have forced more than 4M Canadians from their homes and caused $B s in damage. Payments by governments & insurers have been doubling every 5-10 years. Canadian Red Cross, 2000 For companies that do have plans, 19% haven t tested those plans in the past 5 years. Whitehat & Fibrewired Following a disaster - 4 out of 10 U.S. businesses never reopen; of those that do, 25% close within 2 years. Gartner Research

17 Risk Management & Minimization: LEGAL DUE DILIGENCE is The Answer!

18 Risk Management & Minimization: LEGAL DUE DILIGENCE is The Answer! Standards: NFPA 1600 DRJ/DRII GAP ISO/IEC BS (BSI) 7799 BASEL Committee on Banking Supervision

19 Legal Issues & Liabilities Contracts Pandemics Negligence C-45 Disruption Disaster Emergency Pandemic Employment OH&SA WS&IB Regulatory Compliance Simpson Wigle LLP Critical Business Functions BUSINESS CONTINUITY

20 Contracts Issues: Professional Advice Precedents Terms & Conditions Boiler Plate Force Majeure Outsourcing & SLA s

21 Negligence What is it: A failure to do what a reasonably careful and reasonably prudent person would do in the given circumstances The relation is such as to produce a risk of foreseeable harm, creating a duty of care, and the degree of care is not taken. Jay N. Rosenblatt

22 Negligence: Is This Your CEO? Should I Ignore it or Deal with it? Tell your Board & Sr. Management that Inaction Is a Decision!

23 Negligence: Inaction Is Not The Answer Inaction is an act of Negligence!

24 Employment Employees: Your biggest Resource Your biggest Risk Issues: Inadvertent Disruption (I.T., Security, etc.) Malicious Disruption (I.T., Security, etc.) N.D.A. Non-Comp. Termination

25 Regulatory Compliance Examples: C-12: Emergency Management Act (Canada) Bill 56: Emergency Management Act (Ontario) SOX/Bill 198 S.E.C./Cdn. Stock Exchanges PIPEDA (Canada) OH&SA/WS&IB (Ontario) C-45 (Canada) Others

26 Regulatory Compliance C-12: Emergency Management Act (Canada): boost Canada s role in emergency preparedness coordinate disaster response plans among federal departments Bill 56: Emergency Management Act (Ontario): Provide emergency powers ~ Declared Emergency Promote the public good Protecting health, safety & welfare Prevent, reduce, mitigate harm/damage Travel restrictions, care facilities, goods, services Offences & Penalties DEFENCES: no actions against municipalities & employees good faith exercise of duty

27 Pandemics Pandemic Influenza Risk: Is a Pandemic Influenza Risk really different than any other Emergency Management/Business Continuity Risk Legal Issues/Drivers Business Issues/Drivers

28 Pandemics Introduction: ~35% of the population Spread: entrenched in all the continents within 3 months Death: 50% rate to date; medium level in u.s.: k; 2m-7.4m in world; 1918: 500k deaths in u.s. and 20-50m worldwide Infections & hospitalizations: Sick: 30% (90M) Clinical Visits: 42M Hospitalization: 315K-735K Deaths: 90K-210K New vaccines: No vaccine until exact strain is Isolation is critical known; 6-12 months for INITIAL supply; Tamiflu is no guarantee; New vaccines: 6-12 months CDC, Who, Quarantines: quarantine and E National Institute of Health conomic Impact: $71B-$115B; (SARS: $40B) & not a pandemic

29 Pandemics The pandemic clock is ticking we just don t know what time it is Canada: Sick: 4.5M-10.6M Clinical Visits: 2.1M-5.0M Hospitalization: 34K-138K Deaths: 11K-58K U.S.A.: Sick: 90M Clinical Visits: 42M Hospitalization: 315K-735K Deaths: 90K-210K Toronto: Sick: K Clinical Visits: 161K-701K Hospitalization: 1.6K-14K Deaths: K

30 Pandemics Men s Health November, 2005

31 3 Times/century 3 Issues: Detection Containment Prevention 3 Feet for Social Distancing 3 Days are not enough 3 Waves within 3 (9) months 3 Business Concerns: People Process Products Pandemics: The Rule of 3

32 Bookends Convince you that with Pandemics (& ANY disruption/disaster): Directors & Sr. Managers are at tremendous personal risk Your Business & all its resources are also at tremendous risk You SHOULD worry DUE DILIGENCE is a legal defence There ARE immediate actions that can be taken that will minimize risk to you & your Business These actions MUST be taken WHAT DO WE DO NOW!

33 Risk & Opportunities Leveraging the Opportunities: The pandemic clock is ticking we just don t know what time it is At the heart of each crisis lies a tremendous opportunity. Great Blessings lie ahead for the one who knows the secret of finding the opportunity within each crisis.

34 Legal Resource Analysis Time: Lost or Wasted Manpower: Human Resources, Admin. Disruption Disaster Emergency Pandemic Money: Patrons & Services Space: Locations Simpson Wigle LLP Materials: S.C.M. Critical Business Functions BUSINESS CONTINUITY Information: Information Technology

35 Take Your Pick! Information: Information Technology Space: Locations Manpower: Human Resources Admin. Money: Patrons & Services Materials: S.C.M. Time: Lost or Wasted

36 Up for the Challenge? Write down actions that will have an immediate and positive impact on your Board, Sr. Management & your Business

37 Q & A Jay N. Rosenblatt Simpson Wigle LLP rosenblattj@simpsonwigle.com #301