Understand Indemnification And Advancement In Corporate Disputes
Throughout the course of their careers, many people will encounter legal issues. In some cases, you may be accused of wrongdoing by a customer of your company or, perhaps, you are facing claims of negligence, fraud or a breach of fiduciary duty. These are serious accusations that can involve both civil and, potentially, criminal penalties and fines against both you and your employer. In these cases, it is in your employer’s interest that you win, so the law has two mechanisms by which your employer can help you to defend your case: indemnification and advancement. These two principles allow you to get help from your employer to defend your case if the incident at issue involved conduct committed during the course of your employment.
At the Philadelphia law office of Steve Harvey Law LLC, our skilled commercial litigators are adept at representing clients who are defending themselves in complex corporate litigation, especially agents of corporations (including nonprofits) who are facing claims of breaches of fiduciary duty, fraud, misconduct or other such issues. By relying on indemnification and advancement, your access to legal representation can be secured.
What Is Indemnification And Advancement?
Indemnification and advancement are two legal provisions that exist in many states to provide support to corporate officers accused of wrongdoing while engaged in work on behalf of their employers. Indemnification requires that the corporation that employs the individual being sued be held liable for the actions of their agent and for the damages that were the result of their agent’s actions.
This protects an employee from being held solely liable for their actions when working for their corporation. If the employee wins the case, then the corporation will be obligated to reimburse them for all attorney fees and other reasonable costs incurred while defending the case. While this strategy can be invaluable to the employee, the costs of litigation may overwhelm them before they can be reimbursed by winning the claim. This is where advancement can apply.
Advancement is a proactive alterative to indemnification, whereby the company contracts to advance their employed agent the funds that they need in order to defend themselves in their work-related lawsuit. Normally, the employee is only required to pay back the amount advanced loan if they are found liable in their lawsuit. Many states have permissive or mandatory advancement provisions in their corporate governance laws, so it is important to review them to see which may apply to your case.
Importantly, indemnification and advancement can apply even when it is the company bringing the claims against the employee agent. The attorneys at Steve Harvey Law LLC have experience bringing expedited legal actions to force companies to advance the attorney’s fees of employees sued for misconduct that the employees deny.
When You Need Help Defending Yourself, Call Steve Harvey Law LLC
If you are in need of assistance to defend yourself in a lawsuit involving your work on behalf of your employer, we can help you ensure that you get the support you are entitled to from your employer. Whether that will be an indemnification agreement or an advancement of the legal fees for your case, our lawyers will help you determine what your options are. You can dial our office at 215-907-7313 or send us a message online.