North River Ins. Co. v. Philadelphia Reinsurance Corp.

Issue Discussed: Access to Records

Submitted by James D. Scrimgeour

Date Promulgated: July 21, 1992

North River Ins. Co. v. Philadelphia Reinsurance Corp., 797 F. Supp. 363 (D.N.J. 1992)

Court: United States District Court of New Jersey

Issue Decided: Whether attorney-client communications between the reinsured and insured during alternative dispute resolution proceeding are discoverable.

Key Holding:

In a dispute over reinsurance coverage, a reinsurer sought disclosure of attorney-client documents that were created by the cedant in proceedings with its insured. The reinsurer contended that the documents were discoverable under the common interest doctrine, and under the cooperation clause of the reinsurance agreement, because the cedant had a fiduciary duty to disclose the information. The District Court of New Jersey held that the common interest doctrine did not require the cedant to produce the privileged documents. The court further found that common interest doctrine was not applicable because the parties were not represented by the same attorney in the proceedings. The court stated that there was no automatic waiver of the attorney-client privilege merely because the parties had a common interest in the outcome of the issues presented in the underlying cases. Finally, the court stated that there was no fiduciary relationship between the parties, and the “in issue” argument was not applicable to the controversy.

Key Takeaways:

Privileged document are not discoverable in reinsurance coverage disputes where the reinsured retained its own counsel wholly independent from the insurer, and reinsurer had no input into the relationship between the reinsured and its counsel.

*James D. Scrimgeour is an Executive Counsel at The Travelers Indemnity Company, where he specializes in reinsurance litigation and arbitration.