What’s New: In brief (July 25, 2005)

The 9th U.S. Circuit Court of Appeals in San Francisco recently ruled that an employer who refused to refer to a staff member by his actual Arabic name is liable for employment discrimination. The three-judge panel unanimously affirmed a district court’s ruling upholding a jury verdict that found Greg Young, chief executive officer of Austin, Texas-based BJY Inc., is liable. Young’s reasoning for referring to his employee by a western name was that a “Western” name would increase his chances for success at the engineering firm and would be more acceptable to the company’s clientele, said the decision in El-Hakem vs. BJY Inc.A jury had awarded Mr. El-Hakem $15,000 in compensatory damages and $15,000 in punitive damages for the intentional discrimination against him by Mr. Young on the basis of his race by creating a hostile work environment. It also awarded him $11,000 in wages due. The defendant’s “contention that actionable race discrimination must be based on physical or ‘genetically determined characteristics such as skin color’ ignores the broad reach of the law,” the decision stated. “A group’s ethnic characteristics encompass more than its members’ skin color and physical traits. Names are often a proxy for race and ethnicity,” the opinion added.

A U.K. court has blocked a solvent scheme of arrangement as foreign policyholders could not fairly estimate an aviation insurer’s long-tail liabilities. The ruling prevents British Aviation Insurance Co. Ltd. (BAIC) from running off the business it sought to have covered by the scheme. London-based BAIC was seeking to use the process to run off mainly long-tail products liability business it had written in the U.S. and Canada between 1930 and 1991. BAIC sought court approval to set up the plan after creditors, which include both policyholders with accrued claims and policyholders with incurred-but-not-reported claims, voted against its inception. The proposed court approval was opposed. The policyholders argued their claims had not been properly valued by the plan. Justice Lewison, ruled that the plan proposed by BAIC, which went into runoff in 2002, was “unfair.” According to the ruling, “the most powerful consideration is that it seems unfair to require manufacturers who have bought insurance policies designed to cast the risk of exposure to asbestos claims on insurers to have that risk compulsorily retransferred to them. BAIC is in the risk business and the policyholders are not.”

The Loyalist Insurance Group Limited (TSX-V symbol: LOY) has appointed Martin D. Heppner and Mr. Paul J. Luksha have been appointed to the Company’s board of directors. Heppner, is president of Anchor Securities Limited, securities dealers located in Toronto. Luksha is a general partner with Graoch Associates, real estate investors, located in Toronto, Vancouver, Tacoma, and Houston. “Martin and Paul are welcome additions to Loyalist’s Board of Directors,” Don Coons, president and CEO, states. “Their public company experience, combined with their business and management acumen will provide the Board and the Company with invaluable insight and depth. In addition, Loyalist’s Board now consists of a majority of independent directors.”