Lawyers for Civil Justice (LCJ), a coalition of DRI, FDCC, and IADC has opposed a proposed Financial Accounting Standards Board Accounting Standard FASB Topic 405 Disclosure of Certain Loss Contingencies which would require wide ranging additional disclosures by corporations about pending and potential litigation, including more information obtained from outside counsel about their assessment of strategy and litigation risk in ongoing litigation. Action by FASB is expected before the end of the year.
These proposed changes have far reaching ramifications, not the least of which is the threat to the attorney client privilege and disclosure of strategic information which would benefit counsel suing corporations, even when the loss would be fully insured. LCJ's position is set forth in a letter to the FASB by its President John Martin, a former DRI President. See LCJ Comment Letter 283.
In addition to the opposition by LCJ, over 300 other comments were received, generally in opposition to the changes; see Comments on Proposed Changes to Loss Contingency Disclosures.
Watch this blog, it will keep you informed of any action by FASB on these proposals.