The High Court has ruled that three alleged wrongful acts connected with Perrigo Company plc’s insurance claims should be allocated to its 2016 policy, rather than its 2015 policy.
Mr Justice Twomey delivered the judgment on 31 July 2024 in a dispute between Perrigo, its directors and insurers. The court considered whether the Tysabri Accounting, Collusive Pricing and Pricing Pressure misrepresentations were “similar or related” to two other alleged wrongful acts previously allocated to the 2015 policy.
The insurers argued that the three acts shared the same broad feature as the two earlier acts: each allegedly inflated Perrigo’s value. Perrigo said the 2016 policy applied because the three acts were notified during that policy period.
The judge said the policy wording required a fact-specific comparison. A shared allegation of inflating company value was not enough. The court treated the Tysabri allegation as concerning the accounting treatment of royalty income; the Collusive Pricing allegation as concealing inflated Generic RX results allegedly caused by illegal price-fixing; and the Pricing Pressure allegation as a false claim about Perrigo’s ability to withstand price pressure in the generic drug industry. Those matters were materially different from allegations about standalone organic growth and problems integrating the Omega acquisition.
The court therefore found that none of the three allegations was similar or related to the two acts allocated to the 2015 policy. It held that the three should be allocated to the 2016 policy.
The judge also considered whether all three allegations could be treated as a single claim under that policy. Perrigo had pleaded for a declaration covering the Collusive Pricing and Pricing Pressure allegations, but had not pleaded one for the Tysabri allegation. The judge rejected Perrigo’s argument that a brief reference to Tysabri during the trial had effectively amended its case. The court’s declaration was limited to the Collusive Pricing and Pricing Pressure allegations, which it held were a single claim.
Finally, the court rejected the insurers’ reliance on clause 4.3 of the 2016 policy to avoid cover for the three acts. It concluded that the acts were not based on, arising from or attributable to the earlier acts in a way that engaged the exclusion.
The court said the case would be listed for mention on 11 October 2024, while allowing the parties to notify the registrar if they agreed outstanding matters and final orders beforehand. The judgment did not resolve those remaining matters.