A federal jury is expected to begin deliberations today in the case involving Swiss Re and 12 other insurers over the amount of recovery due to Silverstein Properties as compensation for the destruction of the World Trade Center.
The central issue they’ll be asked to decide in the first of three potential trials will be what language governed the coverage provisions on the WTC. As no formal policies had been prepared on Sept. 11, the issue revolves around the terms contained in binders, or agreements to participate in the eventual policies.
Swiss Re and the others have argued in the acrimonious lawsuit that a form prepared by Willis – the WilProp form – governs coverage. This form refers to an occurrence or a series of occurrences, thus supporting the insurers’ argument that the destruction of both towers was a single occurrence and only a single recovery of around $3.5 billion should be awarded. The court has already ruled that, as a matter of law, the WilProp form supports the insurers’ single occurrence position.
Silverstein relies on a form prepared by Travelers that does not contain such restrictive language. During the 10-week trial both sides have been restrained by Judge Michael Mukasey’s order not to discuss the case outside the courtroom. Larry Silverstein was excluded from attending the remainder of the trail following remarks he made at a public function in March.
According to a report from the New York Times, Swiss Re’s lawyer, Barry R. Ostrager, argued in his summation to the jury that Silverstein and his brokers “manufactured a story” that they hoped would enable the developer to receive a double insurance payment, totaling nearly $7 billion.
Silverstein’s lawyer Herbert Wachtell cited differing testimony in his summation and said that it had produced “overwhelming incontrovertible evidence” that the insurers should pay the entire amount of around $7 billion. He charged that they are trying to exploit the confusion surrounding the Sept. 11 attacks to avoid this responsibility.
The jury will ultimately have to sort out conflicting testimony as to which form each company relied on. Those who can prove, as several already have, that they relied on the WilProp form will have to pay only their share of the recovery based on a single occurrence. Those whom the jury finds relied on the Travelers form will then go to a second trial to determine whether this form does or doesn’t provide for a double recovery.
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