Plaintiffs v Zurich Financial Services
Court Upholds $150M Settlement in Insurer Price-Fixing Class Action
A federal appeals court has affirmed settlements worth $150 million, plus $29.9 million in legal fees and costs, in class action cases alleging that Zurich Financial Services and insurance broker Arthur J. Gallagher & Co. engaged in price fixing from 1994 to 2005.
The 3rd U.S. Circuit Court of Appeals ruled that the settlements reached in 2006 with customers and 10 state attorneys general were fair and reasonable and that the firms who represented the plaintiffs deserved the fees.
More than 50 plaintiffs firms were involved in the case, led by Cafferty Faucher in Philadelphia and Whatley, Drake & Kallas in New York.
The suits, consolidated in federal court in Trenton, were the outgrowth of investigations that showed in 2004 that insurance brokerages particularly industry leader Marsh & McLennan that were ostensibly trying to get the best deals for customers of property and casualty insurance colluded with insurers to divide the business and fix prices at artificially high levels.
Zurich, of Schaumberg, Ill., will pay $122 million to class members and Gallagher, of Itasca, Ill., will create a $28 million fund. A fee of $29.9 million for plaintiffs' lawyers will be paid separately by Zurich. An $8.8 million fee approved for plaintiffs suing Gallagher was not appealed to the Third Circuit.
More than 3.79 million class members are potential beneficiaries of the settlement.
Under the settlement, 51.7 percent of the fund is allotted to Zurich policyholders who purchased excess casualty insurance from 2001 to 2004, those who bought other lines of insurance or excess policies at other times are allotted 33.9 percent and claimants who were not Zurich policyholders but were affected by the alleged wrongdoing will receive 9 percent.
In affirming the settlement, the court said the objectors had failed to articulate how the interests of the members diverge, even with the different allocations.
The 10 states that are party to the agreement are California, Florida, Hawaii, Maryland, Massachusetts, Oregon, Pennsylvania, Texas, Virginia and West Virginia.
For more information please contact:
Cafferty Faucher
1717 Arch Street
Suite 3610
Philadelphia, PA 19103
T: 215.864.2800
Whatley, Drake & Kallas
1540 Broadway
37th Floor
New York, New York 10036
Tel. 212-447-7070
Fax. 212-447-7077
