Chubb European Group SE [Formerly Ace European Group Ltd] & Ors v Perrigo Company PLC & Ors [No.3] (Approved)

Factual and Procedural Background

This judgment is the third arising from the interpretation of insurance policies entered into between the Plaintiffs, a group of insurers including Company A and others, and the Defendant, Company B, concerning claims made by Company B under those policies. The claims relate to class actions brought by shareholders against Company B and its directors. The Court is tasked with determining whether three alleged wrongful acts (referred to as the "Three Wrongful Acts") should be covered by the 2015 Policy or the 2016 Policy. The Three Wrongful Acts are the Tysabri Accounting Misrepresentation, the Collusive Pricing Misrepresentation, and the Pricing Pressure Misrepresentation.

Previously, in the Principal Judgment, the Court addressed whether the Three Wrongful Acts along with three other wrongful acts (collectively the "Six Wrongful Acts") should be aggregated back to the 2014 Policy. The Plaintiffs argued that all Six Wrongful Acts were "similar or related" to wrongful acts notified under the 2014 Policy, while the Defendant disagreed. The Court held that only one of the Six Wrongful Acts was similar or related to those under the 2014 Policy and should be aggregated back accordingly.

Following the Principal Judgment, the Second Judgment addressed the allocation of two of the wrongful acts (the "Two Wrongful Acts") to the 2015 Policy, as they had been notified during that policy period. However, the allocation of the Three Wrongful Acts remained unresolved, as they were notified during the 2016 Policy period, leaving open whether they should be allocated to the 2015 or 2016 Policy.

On 11 July 2024, the Court held a further hearing with submissions from both parties comparing the Three Wrongful Acts to the Two Wrongful Acts to determine whether the Three Wrongful Acts should be aggregated back to the 2015 Policy or allocated to the 2016 Policy.

Legal Issues Presented

1. Whether the Three Wrongful Acts should be aggregated back to the 2015 Policy under Clause 5.1(iii) as "similar or related" to the Two Wrongful Acts allocated to that policy.
2. Whether the Three Wrongful Acts constitute a Single Claim under Clauses 3.51 and 5.2 of the 2016 Policy.
3. Whether Clause 4.3 of the 2016 Policy excludes coverage for the Three Wrongful Acts on the basis that they are based on or arise from wrongful acts notified under a prior policy.

Arguments of the Parties

Plaintiffs' Arguments

• The Three Wrongful Acts are "similar or related" to the Two Wrongful Acts because their essence is the wrongful inflation of Company B's value, and thus should be aggregated back to the 2015 Policy under Clause 5.1(iii).
• Relying on Clause 5.1(iii) of the 2015 Policy, the Three Wrongful Acts should be treated as part of the same event as the Two Wrongful Acts.
• Chubb cannot exclude coverage under Clause 4.3 of the 2016 Policy because the Three Wrongful Acts are not based on, arising from, or attributable to wrongful acts notified under a prior policy.

Defendant's Arguments

• The Three Wrongful Acts are not "similar or related" to the Two Wrongful Acts when applying a fact-specific and detailed analysis as required by the interpretation of event aggregation clauses.
• The broad similarity that all wrongful acts involve wrongful inflation of Company B's value is insufficient to aggregate them under Clause 5.1(iii).
• The Three Wrongful Acts should be allocated to the 2016 Policy as they were notified during that policy period.
• The Three Wrongful Acts constitute a Single Claim under the 2016 Policy only for the Collusive Pricing Misrepresentation and the Pricing Pressure Misrepresentation, but not for the Tysabri Accounting Misrepresentation, which was not pleaded as part of the Single Claim.
• Clause 4.3 of the 2016 Policy does not exclude coverage for the Three Wrongful Acts because they are not based on wrongful acts notified under a prior policy.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Chubb European Group SE & Ors v Perrigo Company PLC & Ors [2024] IEHC 9 (Principal Judgment)	Interpretation of Clause 5.1(iii) as an event aggregation clause requiring a fact-specific and restrictive approach to "similar or related" wrongful acts.	Guided the Court's approach to comparing wrongful acts in this judgment, emphasizing detailed fact-specific analysis over broad similarities.
Perrigo Company PLC & Ors (No.2) [2024] IEHC 272 (Second Judgment)	Allocation of wrongful acts to appropriate policy periods and clarification that unargued issues cannot be decided without submissions.	Informed the Court's procedural approach and the need for further hearing to determine the allocation of the Three Wrongful Acts.
Word Perfect Translation Services Ltd v Minister for Public Expenditure and Reform [2023] IECA 189	Encouragement of a broad-brush approach to costs avoiding nit-picking disputes.	Referenced in relation to the Court’s hope that the parties reach agreement on costs to avoid further proceedings.
Discovery case (referenced)	Two wrongful acts involving theft by the same solicitor were held not to be "similar or related" for event aggregation purposes despite apparent similarities.	Used as a comparative example illustrating the restrictive interpretation of "similar or related" in event aggregation clauses.
Queensland case (referenced)	Claims related to a Ponzi scheme were held to be "related" wrongful acts due to common source and knowledge of fraud.	Illustrated the degree of detail and commonality required for wrongful acts to be considered related under aggregation clauses.

Court's Reasoning and Analysis

The Court applied a detailed, fact-specific approach to determine whether the Three Wrongful Acts are "similar or related" to the Two Wrongful Acts for the purpose of Clause 5.1(iii) of the 2015 Policy, which is an event aggregation clause. The Court emphasized that broad similarities, such as all wrongful acts involving the wrongful inflation of the company's value, are insufficient to satisfy the clause.

The Court reviewed the Principal Judgment’s detailed comparisons of wrongful acts and found that the Three Wrongful Acts—each involving distinct fact-specific misrepresentations related to accounting treatment, pricing practices, and pricing pressures—do not have a sufficient degree of similarity or relatedness to the Two Wrongful Acts, which concerned organic growth and integration issues.

The Court rejected the Plaintiffs' argument that temporal and locational coincidence of misrepresentations automatically establishes similarity or relatedness, clarifying that such factors may be relevant but are not determinative without substantive similarity in the content of the wrongful acts.

Consequently, the Court concluded that the Three Wrongful Acts do not aggregate back to the 2015 Policy and must be allocated to the 2016 Policy.

Regarding the 2016 Policy, the Court accepted that the Three Wrongful Acts constitute a Single Claim under Clauses 3.51 and 5.2, but limited this to the Collusive Pricing Misrepresentation and the Pricing Pressure Misrepresentation, as the Tysabri Accounting Misrepresentation was not pleaded as part of the Single Claim. The Court declined to grant relief beyond the pleaded case despite some oral submissions to the contrary.

The Court further analyzed Clause 4.3 of the 2016 Policy, which excludes coverage for wrongful acts notified under prior policies. Applying the logic from the event aggregation clause analysis, the Court held that since the Three Wrongful Acts are not similar or related to wrongful acts notified under prior policies, they cannot be excluded under Clause 4.3. Therefore, coverage under the 2016 Policy cannot be denied on this basis.

Holding and Implications

The Court holds that:

• The Three Wrongful Acts are not "similar or related" to the Two Wrongful Acts and thus should be allocated to the 2016 Policy, not the 2015 Policy.
• The Collusive Pricing Misrepresentation and the Pricing Pressure Misrepresentation constitute a Single Claim under the 2016 Policy; however, the Tysabri Accounting Misrepresentation is excluded from this Single Claim due to pleading limitations.
• The Plaintiffs cannot rely on Clause 4.3 of the 2016 Policy to exclude coverage for the Three Wrongful Acts.

Implications: The decision directly affects the allocation of claims between insurance policies for the parties, clarifying the application of event aggregation clauses and the scope of Single Claim provisions. No new precedent is set beyond the application and clarification of existing principles regarding policy interpretation and aggregation clauses. The Court encourages the parties to agree on costs to avoid further litigation.