An insider’s view of the recent Delaware legislation banning fee-shifting bylaws is provided by Professor Lawrence Hamermesh and Norman Monhait as published in this post from the Institute of Delaware Corporate and Business Law. This is must reading for anyone who seeks to understand the nuances of this new legislation. In sum, the good professor co-authors the article with one of deans of the corporate litigation bar in Delaware, both of whom played a lead role in drafting the fee-shifting legislation that was just signed by the governor. They explain why this new law does not address the issue of fee-shifting bylaws in the context of claims based on the federal securities laws.

About the authors: Mr. Monhait is the immediate past chair, and Professor Hamermesh a prior chair and a member, of the Council of the Delaware State Bar Association’s Corporation Law Section. The Council each year proposes legislation to update the Delaware corporate and related statutes, including the recently passed fee-shifting and forum selection bills. The views expressed here, however, are solely those of the authors, and do not necessarily represent the views of the Association, the Section, or its Council.

Supplement: Professor Stephen Bainbridge has written an article which takes the position that Delaware made a mistake in passing the legislation described above.