Clifford Chance has been denied summary judgment against its insurer Indian Harbor, in a bid to recover the full costs of a settlement it paid to defunct US firm Brobeck, Phleger & Harrison in 2004.
Management liability insurer Indian Harbor has already paid out $4.4m to Clifford Chance, which is seeking to recover the outstanding amount under the $5.5m settlement as well as a further undisclosed amount.
Clifford Chance’s general counsel Chris Perrin told The Lawyer: “We will either appeal on the summary judgment or go to a full trial. We have not yet decided.”
As previously revealed by The Lawyer, former Brobeck partners had alleged that the magic circle firm was responsible for the US firm’s collapse. The settlement that Clifford Chance paid in 2004 was in part to settle claims that the firm had been instrumental in the demise of Brobeck after chairman Tower Snow defected to the UK magic circle firm with a major team of lawyers in 2002.
Clifford Chance originally asked Indian Harbor to cover the full settlement and the firm’s outlays. Indian Harbor, however, argued that it should only be responsible for 40 per cent of the settlement and that the remaining amount should be attributable to the former Brobeck partners who were not covered by Clifford Chance’s policy.
Justice Fried found that both the insured and uninsured should be responsible for a percentage of the liability and that the level of liability to be properly allocated to the partners should be determined at trial.
Clifford Chance was advised by William Schwartz of Cooley Godward Kronish.