What is a "forum selection clause"?

A forum selection clause is a provision in a contract or by-law that specifies the jurisdiction where legal disputes must be resolved. In this case, The Hartford has designated Delaware courts as the exclusive venue for certain legal actions against the company.

Why would a company implement a forum selection clause?

Companies often implement forum selection clauses to centralize litigation in a specific jurisdiction that is perceived as having expertise in corporate law (like Delaware) and to potentially reduce the volume of lawsuits filed in various other jurisdictions, which can be costly and unpredictable.

How does this affect me as a shareholder?

As a shareholder, this means that if you need to file a lawsuit against The Hartford related to certain corporate matters, you will generally be required to do so in a Delaware court. This could impact the time, cost, and complexity of pursuing legal action compared to filing in your local jurisdiction.

Does this prevent me from suing the company?

No, it does not prevent you from suing the company. However, it significantly restricts the location where such lawsuits, pertaining to specific corporate matters covered by the clause, can be filed. The company can also consent to an alternative forum, but this is at their discretion.

HIG/HIG-PG 8-K: Corporate Changes

Summary

The Hartford Financial Services Group, Inc. (HIG) filed an 8-K on December 17, 2015, primarily to disclose an amendment to its Amended and Restated By-laws. This amendment, effective immediately, establishes a "forum selection clause." Specifically, it designates the Court of Chancery in the State of Delaware (with specific fallback options if that court lacks jurisdiction) as the exclusive venue for certain legal actions against the Corporation. This means that any shareholder lawsuits related to the company's internal affairs will generally need to be filed in Delaware courts. This change is important for investors as it impacts where they can bring legal claims and potentially the cost and complexity of doing so. Forum selection clauses are intended to streamline litigation and potentially reduce the risk of certain types of lawsuits in jurisdictions deemed less favorable by the company. Investors should be aware that this amendment may affect their ability to litigate disputes with the company and could influence the choice of legal counsel and the overall litigation process.

Key Highlights

1The Hartford Financial Services Group, Inc. amended its By-laws on December 17, 2015.
2The amendment establishes a "forum selection clause" within the By-laws.
3The designated exclusive forum for certain legal actions is the Court of Chancery in the State of Delaware.
4Fallback jurisdictions for legal actions include federal district court for the District of Delaware or the Superior Court of the state of Delaware if the Court of Chancery lacks jurisdiction.
5This forum selection applies unless the Corporation provides written consent for an alternative forum.
6The amendment aims to centralize specific types of litigation against the company in Delaware.
7Exhibit 3.1 contains the full text of the Amended and Restated By-laws reflecting this change.

HARTFORD INSURANCE GROUP, INC. 8-K Report, Bylaw Amendment (Dec 17, 2015)

Summary

Key Highlights

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