Chubb European Group SE [Formerly Ace European] v Perrigo Company Plc

JurisdictionIreland
CourtHigh Court
JudgeMr Justice Holland
Judgment Date19 July 2022
Neutral Citation[2022] IEHC 444
Docket NumberRecord No. 2021/3571P
Between:
Chubb European Group SE (Formerly Ace European Group Limited)
AIG Europe SA (Formerly AIG Europe Limited)
Axis Specialty Europe SE
Allianz Global Corporate & Speciality SE
Allied World Assurance Company (Europe) Designated Activity Company (Formerly Allied World Assurance Company (Europe) Limited)
Liberty Mutual Insurance Europe SE (Formerly Liberty Mutual Insurance Europe Limited)
XL Insurance Company SE
Zurich Insurance Plc
QBE Europe SA/NV (Formerly QBE Insurance (Europe) Limited)

and

Lloyd's Insurance Company SA
Plaintiffs
and
Perrigo Company Plc, Joseph Papa, Judy Brown, Marc Coucke, Laurie Brlas, Jacqualyn a Fouse, Ellen R Hoffing, Michael R Jandernoa, Donal O'Connor, Gary Cohen, Herman Morris Jr, Gerald K Kunkle Jr, John Hendrickson, Ronald Winowiecki, Douglas Boothe, David Gibbons

and

Ran Gottfried
Defendants

[2022] IEHC 444

Record No. 2021/3571P

THE HIGH COURT

COMMERCIAL

Discovery – Insurance policies – Indemnity – Defendant seeking discovery of documents – Whether the documents sought were relevant and necessary

Facts: The plaintiff insurers declined indemnity in respect of certain claims made by the defendants on certain Directors’ & Officers’ Liability and Company Reimbursement Insurance policies (the Policies) and on foot of claims made against the defendants by third parties. The plaintiffs sought declarations that the claims were not covered by the Policies or, if covered, were covered by the 2014 Policy only. The defendants counterclaimed that all the claims were covered by one or more of the 2014, 2015 and 2016 Policies. The first defendant, Perrigo Company Plc (Perrigo), applied to the High Court seeking discovery from all plaintiffs of all documents relating to the interpretation of the Policies, the declining of indemnity and the attribution of any rights of indemnity to the 2014 Policy only.

Held by Holland J that, regarding categories 1-3, he would grant discovery limited to documents which evidence or record the understanding of participants in the market in Directors’ & Officers’ Liability and Company Reimbursement Insurance policies and like policies at the time each Policy was written of the concept of Securities Law as used in such policies. Regarding categories 11-16, he held that he would grant discovery limited to documents which evidence or record facts relevant to coverage decisions in respect of the Perrigo Claims with reference to the 2014, 2015 and 2016 Policies, such facts to include: facts relevant to the interpretation of the Policies; and facts relevant to the categorisation of the claims made on the Policies and their relationships to the claims made in the Mylan Counterclaim and/or to the Specific Matters identified in the Specific Matters Exclusion endorsement to the 2016 Policy. Regarding categories 18 and 19, he held that he would grant discovery limited to documents relevant to: facts known or available to both the plaintiffs and the defendants when each policy was made; and the state of the market in Directors’ & Officers’ Liability and Company Reimbursement Insurance policies and like policies at the time each Policy was written and as the state of such market was generally known to participants in that market. Regarding category 21, he held that he would grant discovery limited to documents relevant to the state of the market in Directors’ & Officers’ Liability and Company Reimbursement Insurance policies and like policies at the time each Policy was written and as the state of such market was generally known to participants in that market.

Holland J invited the parties to liaise as to the drafting of the intended order as to discovery.

Discovery ordered.

JUDGMENT OF Mr Justice Holland DELIVERED THE 19 TH OF JULY 2022

Contents

Judgment of Mr Justice Holland delivered the 19 th of JULY 2022

2

Introduction and Background

4

Mylan Counterclaim

6

Omega Counterclaim

8

29 Securities Actions — including Roofers 1 & 2 and Carmignac

9

Claims Made Policies, Aggregation

10

Reed Smith letter & Kennedy's Reply to Reed Smith

11

Shareholder Demand Letter & Perrigo Derivative Complaint/Claim

13

“Perrigo Claims” & “Contested Claims”

14

2017 & 2018 Policies

14

Interpretation, Factual Matrix & Discovery — Initial Observation

14

The Pleadings & the Policies

15

Statement of Claim & Particulars

15

The Reliefs Claimed

15

Omega Counterclaim & Perrigo Derivative Complaint not Securities Claims

16

2014 Policy Condition 5.1(iii) — Limit of Liability

18

2015 to 2018 Policies §4.3 — Prior Notice Exclusion

18

2016 to 2018 Policies §5.2 — Single Claim Provision

18

2016 to 2018 Policies — Specific Matters Exclusion Endorsement

19

Coverage Position Correspondence

20

Particulars of Wrongful Acts/Misrepresentations & Relationships Between Them

20

Perrigo's Amended Defence & Counterclaim & Particulars thereof

22

Notice for Particulars of Perrigo's Defence & Counterclaim & Reply thereto

24

Other Pleadings

25

The Discovery Sought, Offered & ResIsted

25

Categories 1 – 5: The Omega Counterclaim

25

Categories 6 – 10: The Perrigo Derivative Complaint

25

Categories 1 – 10 — Reasons

26

Categories 11 – 16: The Perrigo Claims

26

Categories 11 – 16 — Reasons

27

Categories 17 – 21: The Policy Documents, Underwriting Files, and Guidelines Applicable to the Policies and Claims 28

Categories 17 – 21 — Reasons

29

Affidavit of Julie Murphy O'Connor

29

Affidavit of Andrew McGahey

32

Discovery by Perrigo to the Plaintiffs

35

Law on Discovery

37

The Purpose and Importance of Discovery

38

The Broad Principles

39

Relevance to the Issues Pleaded — Admissibility not the Criterion

43

Standard of Proof of Relevance

46

Necessity

48

Proportionality & Burden

48

Tensions between Principles and Imperfectly Informed Judgment

50

Documents “relating to” — Documents which “evidence or record”

51

Reformulation of Categories

52

Law on Discovery — Mythen

53

Principles of Interpretation of Insurance Policies

58

Submissions

63

Perrigo's Submissions

64

Plaintiffs' Submissions

65

Analysis

69

The 2017 & 2018 Policies

69

Proportionality & Burden

70

Discovery for purposes of Interpretation of Contracts

71

Hyper Trust Illustrative as to relevance of Documents & Law Society v MIBI

74

Marketing and Explanatory Materials

77

Discovery for purposes of Interpretation Contra-Proferentem

78

The Basis on which the Coverage Decisions May be Challenged at Trial.

79

Whether Claims are Securities Claims? — The Omega Counterclaim & the Perrigo Derivative Complaint

81

Omega Counterclaim — Securities Law

81

Perrigo Derivative Claim

82

Reserves & Claims Handing Guidelines

83

Hyper Trust Illustrative as to Admissibility of Expert Evidence

84

CONCLUSION

85

INTRODUCTION AND BACKGROUND
1

This judgment concerns a discovery application by the First Defendant, (“Perrigo”) against all Plaintiffs in a complex claim as to insurance coverage. Perrigo is a public limited company and, simplifying somewhat, a manufacturer of generic and over-the-counter drugs. It is the policyholder under a series of 5 Directors' & Officers' Liability and Company Reimbursement Insurance policies named, by reference to commencement date, for each of the years 2014 to 2018 inclusive 1 (“the Policies”). I will use the commencement dates to describe the policies accordingly but such description is a little misleading in that each policy started in mid-December and so, in much the greater part, covers the following year.

2

Under each Policy the Defendants other than Perrigo (“the other Defendants”) are insured persons 2. The other Defendants have been directors and officers of Perrigo. Again simplifying and as the title to the Policies intimates, their general purpose is to indemnify Perrigo and the other Defendants in respect of certain types of legal actions taken against them by third parties asserting wrongs in the management and governance of Perrigo. The other Defendants are separately represented and did not participate in the motion. Perrigo is also an insured person but only as to certain “Securities Claims” alleging “Wrongful Acts” against Perrigo 3.

3

The Plaintiffs are the insurers potentially liable on the Policies. Though nothing turns on it for present purposes, it bears noting that the First Plaintiff – Chubb — was the lead underwriter and subscribed to 100% of the primary layer of insurance under each policy, with the remaining Plaintiffs subscribing for various excess layers in varying percentages 4.

4

The Plaintiffs have declined indemnity in respect of certain claims made by the Defendants on certain of the Policies and on foot of about 30 claims (including a class action) made against the Defendants by third parties in 2015 and succeeding years. The Plaintiffs in these proceedings in essence seek declarations that the claims are not covered by the Policies or, if covered, are covered by the 2014 Policy only. They sent 31 “Declinature”/“Coverage Position” letters to the Defendants setting out their positions to that effect. The Defendants counterclaim to the contrary – that all the claims are covered by one or more of the 2014, 2015 and 2016 Policies. Depending on how the claims are distributed to the various Policies, it seems that about €125 million is at stake in the proceedings.

5

I will later list the categories of discovery sought but very broadly, Perrigo seeks, and the Plaintiffs resist, discovery from all Plaintiffs of all documents relating to the interpretation of the Policies, the declining of indemnity and the attribution of any rights of indemnity to the 2014 Policy only. The protagonists made written and...

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1 cases
  • Wegner v Murphy
    • Ireland
    • High Court
    • 23 September 2022
    ...UA v National Treasury Management Agency [2015] IECA 246. 9 Chubb European Group SE [Formerly Ace European] v. Perrigo Company Plc [2022] IEHC 444 (High Court (General), Holland J, 19 July 2022) 10 O'Brien v Red Flag Consulting Ltd & Ors [2017] IECA 258. The principles listed in Red Flag ha......

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