The legal dispute between Swiss Re and Silverstein Properties over whether the destruction of the twin towers of the World Trade Center constituted one occurrence or two, has erupted into a dispute between Swiss Re and the Willis group who acted as brokers in placing the WTC coverage.
While the case is a long way from trial, all the parties have been conducting extensive discovery proceedings. On Friday May 3, Swiss Re filed a motion “to break the purported Silverstein/Willis “Joint Interest” privilege asserted by Wachtell, Lipton” [Attorneys for Silverstein and Willis], according to an announcement released on Wednesday.
“In so doing, Swiss Re is asking the Court to require production of highly relevant facts surrounding Silverstein’s post-loss reinvention of the WTC insurance coverage placement history,” the bulletin continued.
In essence Swiss Re appears to have charged Silverstein and Willis with trying to alter the evidence in the case by presenting a form – the Traveler’s form – purportedly showing that a two event occurrence was agreed to when the coverage was bound. As opposed to the reinsurer’s contention that all parties had signed another form – the WilProp form – which refers to all losses from a single occurrence or series of occurrences as being one loss, i.e. one event.
Jacques Dubois, chairman of Swiss Re America Holding Corp, stated in the announcement that, “It is now obvious that Silverstein’s Travelers form two-occurrence confection is nothing but a post-loss creation by Silverstein and his counsel and bears no relation to the actual placement history.” The company added that “it is crystal clear that virtually all of the insurers bound coverage on the Wilprop form and no fully negotiated Travelers form existed prior to September 11 and, in fact, neither Willis nor Silverstein wanted the Travelers form.”
Swiss Re stated that,”Willis executives and Silverstein’s own senior insurance risk manager established in deposition testimony and in written material that, on September 12, after much discussion among these insurance professionals, they determined that the Wilprop form was the controlling policy form and that the tragedy constituted one occurrence. Upon the arrival of Silverstein’s counsel days later, however, Silverstein’s revisionist history campaign began. Swiss Re now asks the Court to stop Silverstein’s improper obstruction of the discovery process and allow the truth to out.”
Lawyers for Silverstein and Willis have vigorously denied the allegations made by Swiss Re, calling them absolutely untrue, and promising to vigorously oppose the motion.
Charging one of New York’s largest property companies and the world’s third largest insurance broker with perjury, tampering with the evidence and obstructing the legal process – all criminal offenses, if proven – is extremely serious, and goes well beyond the usual pre-trial legal wrangling. The problem now is, once such accusations are made, they can’t be unmade, and what has become a very nasty legal dispute promises to get even nastier. None of the parties will walk away from it unscathed.
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