May 9, 2002 by Canadian Underwriter
In the latest stage of the ongoing legal battle between Swiss Re and World Trade Center (WTC) leaseholder Larry Silverstein, the insurer has filed a motion to break the “joint interest” privilege asserted by Silverstein and broker Willis. This privilege relates to meetings arranged by Silverstein lawyers with Willis, WTC owner the New York Port Authority and the owner of the mall beneath the WTC subsequent to September 12, 2001.
Silverstein and Swiss Re, as well as several other insurers involved in the coverage of the WTC, have been engaged in legal wrangling since the destruction of the facility in the September 11 terrorist attacks. Silverstein is seeking to have the attacks classified as two separate occurrences, and therefore collect double the approximate US$3.5 billion payout on the WTC policy.
Recently Silverstein’s lawyers issued a statement recounting their view of the depositions to date and making their contention that insurers other than XL Capital and ACE were bound by the “Travellers” form, which gives no definition of “occurrence”, thus leaving that determination to the courts.
Swiss Re says that the Travellers form was never in use and that insurers were bound to the “Wilprop” form “or a Wilprop equivalent”, thus supporting their definition of the attacks as a single event.
In this most recent filing with the court, Swiss Re accuses Silverstein of a “revisionist history campaign”, and contends that the Silverstein interests were aware that the Wilprop form was in force on September 11.
“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,” says Jacques Dubois, chairman of Swiss Re America Holding Corp. “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.”
The Swiss Re filing suggests that the Willis broker involved, Tim Boyd, and the Silverstein risk manager, Bob Strachan, both intended and were aware that the Wilprop form was in effect when the twin towers collapsed. “Strachan, the senior-most person at the Silverstein organization involved in the World Trade Center insurance placement, testified that he provided copies of the WilProp form to both the Port Authority and to GMAC on September 12, 2001 in response to inquiries from those parties concerning the operative policy form that covered the World Trade Center loss,” says a Swiss Re press release relevant to the filing.
Swiss Re also contends that undue pressure was exerted on the broker to go along with the two-occurrence theory, a charge which Willis has publicly denied.