Attorney Says Marsh Trial To Last Into June

The trial of two former Marsh executives is expected to run into June as prosecutors attempt to paint them as criminals, while the defense contends they were far from it, a defense attorney said.

Last week, two former executives with Marsh–William Gilman and Edward McNenney–went on trial before New York Supreme Court Judge James A. Yates. Both defendants are being tried without a jury.

Robert J. Cleary, an attorney with the law firm Proskauer Rose in New York City, who is representing Mr. Gilman, told National Underwriter today that he expects the trial to last a number of weeks, before turning it over to Judge Yates for a decision sometime in June.

Mr. McNenney is represented by Stephen C. Neal, an attorney from California with the law firm Cooley Godward Kronish.

The prosecution has already called four witnesses and more are expected, he said. Among those who have testified, Mr. Cleary noted, is Kathryn Winter, a former Marsh executive.

Ms. Winter is among four Marsh executives who have already pled guilty to charges that they engaged in defrauding clients by steering insurance contracts to certain carriers in exchange for lucrative contingent commissions.

Mr. Cleary said prosecutors claim the executives conspired to inflate insurance costs by not releasing the proposals to an open market. Instead, the executives are accused of manipulating insurance placements to obtain false bids from other carriers.

A 37-count indictment handed up in September 2005 accused eight Marsh executives–including Mr. Gilman and Mr. McNenney–of scheming to defraud, restraint of trade and competition, and grand larceny.

However, Mr. Cleary said the executive's actions were not acts of fraud, but were aimed at getting the best coverage for their clients in a very limited market.

“They were the underwriter's worst nightmare,” he said. “They beat-up the insurers to get the best coverage for their clients.”

The broker's actions, he contends, were designed to obtain the most favorable terms and conditions possible for clients in a market where realistically only one carrier was willing to write the coverage.

He explained that the broker's practices were aimed at pressuring the insurer seeking the renewal business to believe they could lose the account if they did not deliver for the client.

“A lot of the facts are not in dispute,” said Mr. Cleary. “This is the way Marsh operated and has done business for years and years.”

Brokers could have turned to the wholesale markets and obtained cheaper insurance, he said, but that would have meant placement with carriers with less than “A” ratings and questionable stability, he added.

He said price was not an option that the Fortune 1000 companies were as concerned with, as they were with carrier stability and breadth of coverage.

Concerning allegations of phony price quotes from carriers, Mr. Cleary said this was not an issue his client was involved in.

It has been widely reported that the case is being prosecuted by Assistant Attorney General Nina Sas. Numerous calls and an e-mail requesting information and comment from Attorney General Andrew M. Cuomo's office have gone unanswered.