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Duke and AIG Settle Lawsuit in Lacrosse Scandal

Posted on 24 Feb 2011

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Duke University has settled a lawsuit against National Union Fire Insurance Co., an affiliate of insurance giant AIG, over costs associated with the Duke lacrosse scandal.

Duke had been wrangling with the insurer whether it should reimburse the university for costs tied to the confidential settlements of lawsuits with three former lacrosse players and the former lacrosse coach.

Duke agreed to dismiss the suit, and each party will pay its own attorneys fees. The terms of the settlement have not been made public.

Initially, AIG said it was left in the dark and shouldn't have to pay for any of the settlement costs. It said university officials violated the contract by not telling the company about the settlements with the players until after the fact. The university argued that it was barred from disclosing information because of the settlements’ confidentiality clause.

The case stems from rape allegations that an escort-service dancer lodged against three players after a lacrosse team party in June 2006. Before all the facts were gathered and any criminal charges were filed, Duke suspended the team's season.

In April 2007, state Attorney General Roy Cooper dismissed all charges against the wrongly accused. In June 2007, Duke entered a settlement with three players.