Jay N. RosenblattPartner

Simpson Wigle LLPwww.simpsonwigle.com

Business Preparedness:

A ‘Legal’ Umbrella to Keep You Protected

Business Preparedness:

A ‘Legal’ Umbrella to Keep You Protected

16th World Conference on

Disaster Management

© Simpson Wigle LLP WCDM June 20, 2006: Ver. FINAL

Who We AreWho 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 Businessfounder of the Golden Horseshoe Venture Forum (www.ghvf.org)

Business Preparedness:Outline

Convince you that with ANY Disruption/Disaster:Directors & Sr. Managers are at tremendous personal riskYour Business & all its Resources are also at tremendous riskYou SHOULD worryDue Diligence is a legal defenceThere ARE immediate actions that can be taken that will minimize risk to you & your BusinessThese actions MUST be taken

Business Preparedness:Emerging Trends & Issues

“E.M. & B.C. Working Together”Business Continuity v. Disaster RecoveryLow Frequency/High ImpactHigh Frequency/Low ImpactPersonal PreparednessEmployeesRegulatory ComplianceOutsourcing

Business Preparedness: Who Needs Protection

DirectorsSr. ManagementYour Business & its Resources:

PeopleProcessProductsOther resources

Business Preparedness:Legal Issues & Liabilities

BUSINESS CONTINUITY

Critical Business Functions

Contracts

OH&SAWS&IB

Negligence

C-45

Pandemics

Regulatory Compliance

EmploymentDisruptionDisaster

EmergencyPandemic

© Simpson Wigle LLP

Business Preparedness:NON-Legal & Liabilities

ShareholdersEmployeesSupply Chain Management (SCM)Investors/LendersReputation ManagementCompetitive AdvantageInsuranceProfitsExit Strategies (including going Public)New Opportunities

Business Preparedness:Risk & Opportunities

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

Seeds of Wisdom

Business Preparedness: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

Business Preparedness:Disaster

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

Anonymous

Business Preparedness:Warnings

Ice Storm: 19989/11: 2001SARS: 2003N. Am. Power: 2003Tsunami: 2004T.O. Blackout: 2005London Terror: 2005Katrina: 2005

Avian Flu: 20??

Business Preparedness:Be a Leader!

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

Business Preparedness:Here’s the Problem!

© Simpson Wigle LLP

Business Preparedness:Risks

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

Causes of Interruptions (2004) 2005 Interruptions Affecting Businesses

Business Preparedness:Costs

Millions of Dollars per Hour in Lost Revenue

6.5

3.62.8

2.6

21.6

1.61.5

1.3

1.21.1

Retail brokerage

Point of sale

Energy

Credit card sales authorization

Telecommunications

Call location

Manufacturing

Financial institutions

Information technology

Insurance

Retail

Source: META Group

Business Preparedness: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

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

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

Standards:NFPA 1600DRJ/DRII GAPISO/IEC 17799BS (BSI) 7799BASEL Committee on Banking Supervision

Business Preparedness:Legal Issues & Liabilities

BUSINESS CONTINUITY

Critical Business Functions

Contracts

OH&SAWS&IB

Negligence

C-45

Pandemics

Regulatory Compliance

EmploymentDisruptionDisaster

EmergencyPandemic

© Simpson Wigle LLP

Contracts

Issues:Professional Advice‘Precedents’Terms & ConditionsBoiler PlateForce MajeureOutsourcing & SLA’s

Negligence

What is it:

A failure to do what a reasonably carefuland 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

Negligence:Is This Your CEO?

Should I Ignore it or Deal with it?

Tell your Board & Sr. Management that

Inaction Is a Decision!

Negligence:Inaction Is Not The Answer

Inaction is an act of Negligence!

Employment

Employees:Your biggest ResourceYour biggest Risk

Issues:Inadvertent Disruption (I.T., Security, etc.)Malicious Disruption (I.T., Security, etc.)N.D.A.Non-Comp.Termination

Regulatory Compliance

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

Regulatory Compliance

C-12: Emergency Management Act (Canada):boost Canada’s role in emergency preparednesscoordinate disaster response plans among federal departments

Bill 56: Emergency Management Act (Ontario):Provide emergency powers ~ Declared EmergencyPromote the public goodProtecting health, safety & welfarePrevent, reduce, mitigate harm/damageTravel restrictions, care facilities, goods, servicesOffences & Penalties

DEFENCES: no actions against municipalities & employees … good faith exercise of duty …

Pandemics

Pandemic Influenza Risk:Is a Pandemic Influenza Risk really different than any other Emergency Management/Business Continuity RiskLegal Issues/DriversBusiness Issues/Drivers

Pandemics

Introduction: ~35% of thepopulation

Spread: entrenched in all thecontinents within 3 months

Death: 50% rate to date; medium level in u.s.: 100-200k; 2m-7.4m in world;1918: 500k deaths in u.s. and 20-50m worldwide

New vaccines:No vaccine until exact strain isknown; 6-12 months for INITIALsupply;Tamiflu is no guarantee;New vaccines: 6-12 months CDC, Who,

Quarantines: quarantine and EIsolation is critical

Infections & hospitalizations:Sick: 30% (90M)Clinical Visits: 42MHospitalization: 315K-735KDeaths: 90K-210K

conomic Impact:$71B-$115B; (SARS: $40B) & nota pandemic

National Institute of Health

Pandemics

‘The pandemic clock is ticking – we just don’t know what time it is’

Canada:Sick: 4.5M-10.6MClinical Visits: 2.1M-5.0MHospitalization: 34K-138KDeaths: 11K-58K

U.S.A.:Sick: 90MClinical Visits: 42MHospitalization: 315K-735KDeaths: 90K-210K

Toronto:Sick: 392-914KClinical Visits: 161K-701KHospitalization: 1.6K-14KDeaths: 630-4.3K

Pandemics

Men’s HealthNovember, 2005

Pandemics:The Rule of 3

3 Times/century3 Issues:• Detection• Containment• Prevention

3 Feet for Social Distancing3 Days are not enough3 Waves within 3 (9) months3 Business Concerns:• People• Process• Products

Business Preparedness:Bookends

Convince you that with Pandemics (& ANYdisruption/disaster):

Directors & Sr. Managers are at tremendous personal riskYour Business & all its resources are also at tremendous riskYou SHOULD worryDUE DILIGENCE is a legal defenceThere ARE immediate actions that can be taken that will minimize risk to you & your BusinessThese actions MUST be takenWHAT DO WE DO NOW!

Business Preparedness: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.

Business Preparedness:Legal Resource Analysis

BUSINESS CONTINUITY

DisruptionDisaster

EmergencyPandemic

Critical Business Critical Business FunctionsFunctions

Manpower:Human

Resources, Admin.

Materials:S.C.M.

Money:Patrons & Services

Time:Lost or Wasted

Information:Information Technology

Space:Locations

© Simpson Wigle LLP

Business Preparedness:Take Your Pick!

Information:Information Technology

Space:Locations

Money:Patrons & Services

Materials:S.C.M.

Manpower:Human Resources

Admin.

Time:Lost or Wasted

Business Preparedness:Up for the Challenge?

Write down actions that will have an immediate and positive impact on your Board, Sr. Management & your Business

Business Preparedness:Q & A

Jay N. RosenblattSimpson Wigle LLProsenblattj@simpsonwigle.com905-528-8411 #301