Back in January,we posted a story concerning an ugly bit of litigation in New York City between Liberty Mutual and one of its defense firms in which a dispute concerning overdue fees had degenerated into allegations that a senior claims executive ("Mr. X") was demanding kickbacks for assigning more files and the law firm was trying to blackmail the carrier by revealing details of Mr. X's use of a lawyer's apartment for sexual trysts.
We are happy to report that this tawdry mess that was Michael J. Devereaux & Associates vs. Liberty Insurance Underwriters,has come to a conclusion. It was reported this week that the parties have come to terms and agreed to settle. In a statement to the press, Michael J. Devereaux claimed that Liberty Mutual had agreed to pay the firm's fees. “Our attorney’s fees and costs are being paid,” said Mr. Devereaux. “I consider it a vindication of our firm” he said, adding Mr. X has been fired. For its part, Liberty Mutual said, “We are pleased that litigation has been resolved, and that we have concluded our relationship with the Devereaux firm.”
The issue of possible kickbacks and corrupt relationships between claims adjusters and outside counsel is a serious one that companies take pains to police and prevent. I myself have always made it a policy to keep my guest bedroom so messy that no self-respecting clients would want to use if for a tryst.