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Gallagher settles defamation suit with med mal insurer

Posted On: Oct. 29, 2019 3:05 PM CST

Defamation ruling

Arthur J. Gallagher & Co. earlier this month settled a suit filed by New Jersey Physicians United Reciprocal Exchange alleging executives at the brokerage disseminated false information about the medical professional liability insurer.

According to New Jersey Physicians Reciprocal Exchange v. Arthur J. Gallagher & Co.; William Carey, filed in U.S. District Court in Trenton, New Jersey, by NJ PURE in March 2018, an executive at Gallagher presented misleading financial information about the Princeton, New Jersey-based nonprofit insurer, which offers coverage directly to physicians in competition with Gallagher, to a group of physicians; and in a 2017 email to Empire Medical Associates P.C., a health care organization, made misleading statements about NJ PURE’s financial condition.

In addition, NJ PURE alleged that Gallagher altered court records in an email to physicians, making them appear to indicate that NJ PURE was subject to a $4.8 million award.

Responding to the charges, Gallagher said the figures it quoted in the presentation to physicians were from the public record and the opinions in the email to Empire Medical were “derived from authoritative sources,” and that Empire Medical subsequently transferred its business to NJ PURE from Gallagher, so there was no loss to the insurer.

Regarding the alleged court award, Gallagher said that the executive who circulated the information, William Carey, a Philadelphia-based managing director, “mistakenly stated that the court had entered a $4.8 million verdict in the case” and “now recognizes that he misunderstood the developments” in the case.

Terms of the Oct. 14 settlement were undisclosed, but it included a retraction by Gallagher acknowledging that the information its employees distributed about the judgment “were not correct, in the sense that, at the time the emails were sent by Gallagher, no monetary judgment had been entered.”

Gallagher declined to comment on the settlement.