WTC Jury Continues Deliberations

April 23, 2004

The federal jury, which began deliberations on Monday, April 19, in the first of three potential trials to determine the extent of the recovery for the destruction of the World Trade Center, has as yet reached no verdict. They will not meet today, but will continue their deliberations on Monday.

The case is the most important trial involving the terrorist attacks of Sept. 11, and with a potential $3.5 billion riding on the outcome, it’s apparent that the jurors are taking their responsibility very seriously. Silverstein Properties, the master leaseholder, and the Port Authority of New York and New Jersey, the owner, claim they are entitled to recover two separate amounts of approximately $3.5 billion for the destruction of each of the twin towers. A group of 13 insurers, led by Swiss Re and Travelers, claim the destruction was one event, and therefore only a single recovery should be paid.

According to news reports, the jury initially focused on an-mail sent by a Willis broker to underwriters at Swiss Re. Willis’ role in the case is potentially determinant, as Swiss Re has claimed that the binding forms used were prepared by Willis and contain language referring to “an occurrence or series of occurrences” that would support its single event position. Swiss Re has maintained that it accepted only the Willis (WilProp) form.

On Monday the jury asked for clarification of an e-mail, which had attached a form prepared by Travelers that doesn’t contain the restrictive language. Swiss Re did not respond to the e-mail, and the jury queried Judge Michael Mukasey as to whether this could be considered an acceptance of the form. His response on Tuesday was that in certain circumstances such “silence” could mislead the contracting parties into considering that form as accepted. He placed the decision back with the jury, however, asking them to re-examine the e-mails and the testimony surrounding them.

Judge Mukasey had also told the jury as they began to deliberate that the burden of proof was on the insurers as far as the forms were concerned. The admonition confirms that Swiss Re, as the initial and lead plaintiff (it originally filed the action for declaratory relief in October 2001), must therefore show that a majority of the evidence supports the use of the WilProp form. If the evidence were equal, or indeterminate, the jury would be required to support the Silverstein position.

On Wednesday the jury reportedly focused on the role played by several Lloyd’s syndicates in the coverage of the twin towers, asking for clarification of certain facts and requesting testimony.

They ended their deliberations on Thursday without asking for additional information.

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