D&O And Company Reimbursement Insurance: Commercial Court Considers Aggregation And Coverage Disputes

• Published date: 01 April 2024
• Law Firm: Dillon Eustace
• Author: Ms Rachel Turner

In Chubb European Group SE & Ors v. Perrigo Company PLC & Ors[2024] IEHC 9, the Commercial Court considered the interpretation of an aggregation clause in a contract of insurance and in particular, the circumstances in which a subsequent claim ought to aggregate back to the policy of an earlier claim. In addition, the Commercial Court determined a number of other coverage related disputes between the parties, including the question of whether proceedings specified in an exclusion clause remain excluded in the event those proceedings are subsequently amended.

Background

Certain directors of the first defendant ('Perrigo'), a company incorporated in Ireland, were accused of falsely inflating Perrigo's value to dissuade shareholders from accepting a financially attractive offer for their shares ($179 per share) from another company, Mylan. Shortly after the offer was rejected, the share price of Perrigo dropped to $89 per share and Perrigo shareholders took a number of class actions in the USA against the company and its directors. Mylan also pursued an action against Perrigo for a series of alleged misrepresentations regarding the offer made ('Mylan Counterclaim').

Perrigo had taken out a series of Directors' and Officers' and Company Reimbursement insurance policies ('Policy'), including in the years 2014, 2015 and 2016, which covered legal expenses and costs incurred by the directors in the event of any claims against them in the exercise of their duties. The relevant insurers were represented in the proceedings by the first plaintiff ('Chubb').

The Mylan Counterclaim was covered by the 2014 Policy and the...