Ex Olympus CEO succeeds with Noerr’s help in a D&O-dispute before the High Court

Represented by Noerr, the former CEO of Olympus and whistle-blower Michael Woodford, MBE, and his former colleague Paul Hillman have succeeded in their D&O dispute with AIG Europe before the High Court of London.  Today the Court has handed down judgment against the insurer (Claim No. LM-2017-000031).  The dispute centred around insurance cover for the claimants arising out of a D&O policy taken out by Olympus Europa with AIG.  The policy was governed by German law.  The jurisdiction of the English Court followed from EU law relevant to insurance matters.

The High Court found in favour of Michael Woodford and Paul Hillman and against AIG Europe on all elements of the claim.

The Court has found that the D&O insurer denied insurance cover without good reason.  As a result, AIG is now obliged to provide insurance cover for the costs of defending proceedings being brought against Woodford and Hillman by an Olympus subsidiary.  The trial of that claim is due to begin in a couple of weeks.  At the time of refusing cover, AIG alleged that the policyholder had prior knowledge of the breaches of duty being alleged in the damages claim.  AIG sought to rely on the fact that the policyholder had not answered its questions about the facts within the deadline as a further reason for declining cover.  In its view, the policyholder had breached the cooperation obligations in the policy.

The Court did not agree with these arguments.  In particular, the High Court found on the facts that there had been no relevant prior knowledge at the policyholder, which might have entitled the insurer to decline cover.  In such circumstances, the Court did not have to issue a decision on the question of whether prior knowledge by the policyholder could affect cover of the insured persons.  The court further found that there had been no intentional breach of obligation by the policyholder.  Although not strictly necessary, the Court supported its decision by also finding that even if a deliberate breach of obligation had occurred, such breach had not caused any detriment to the insurer in a legally relevant manner.  Finally the Court ruled that the defence costs incurred up until now by Woodford and Hillman in an amount of ca. £4 million were reasonable and accordingly recoverable in their entirety from the D&O insurer.

Noerr-Partner Dr Oliver Sieg, Co-Head of Litigation:

“It is unusual for the contents of a German insurance policy to be disputed before a foreign Court. The international set-up at Noerr has made it possible, also in this case, to successfully assert our clients’ rights.”

Michael Woodford:

"I'm relieved at the judgment and now look forward to working with AIG’s support in defending the forthcoming case with Olympus."

Paul Hillman:

“We would like to thank Lucy Holden and all of the team at Noerr and Stephen Midwinter QC for their tremendous support over the last year.”

Representing Woodford and Hillman:

Noerr LLP: Dr Oliver Sieg, Düsseldorf and Lucy Holden, Munich

Barrister: Stephen Midwinter QC, Brick Court Chambers