On 17 June, Cathal Lyons was involved in an accident whilst on business in Russia, resulting in the loss of both part of the foot and shoulder on his right side. He held both an Accidental Death and Dismemberment (AD&D, with a company known as AGF) and a Long Term Disability (LTD, with Colonial) insurance policy at the time under the terms of the accounting business in which he as a partner. He thought he was covered, that his medical needs would be met without concern and that his family would be able to move forward. He was wrong. Like the famed Boethius, Cathal rapidly found himself bereft of support as the insurance company abandoned when he could no longer continue to work. The fall from blessed security was no less than that of the sixth century senator and philosopher. He has been left with no other option than to seek compensation through the courts, a process he instigated with the submission of his statement of claim to the courts in London in March 2014.
The insurance policies under which Cathal was covered were included in his contract of partnership. Although he had been assured that his medical needs were covered after the accident, Cathal wanted to be certain. On 1 July 2006, two weeks after his accident the company changed insurers for it’s LTD cover (from Colonial to Ingosstrakh/Generali) and it is in part this that has caused such angst. Cathal first engaged solicitors Fox Williams in February 2007 to review his circumstances and advise him appropriately regarding his insurance needs. Cathal forwarded his solicitor copies of the insurance company member booklets, summary of benefits and the LTD insurance policy.
Fox Williams is a London based legal firm specializing in business law. Among the areas in which they claim expertise is Partnerships and LLP. They state that:
“Much of our work has an international dimension. We advise overseas professional service firms establishing offices in the UK and continental Europe and advise on cross-border mergers of partnerships.
The commercial solutions to many of the issues faced by partnerships and LLPs cannot be found in textbooks. Experience in handling these issues is essential. The depth of experience of our partnership law group is unrivalled. Many new clients come to us as a result of existing client recommendations.”
With Cathal based in Russia in a role that included travel across borders, it would seem that Fox Williams should have been well versed to manage his needs.
By 2008, Cathal attests that he realized that he would never work full-time again and instructed his solicitor at Fox Williams LLP, to assist in his transition from the permanent workforce to a consultancy role with the same company so as to continue to earn some income. Cathal was on the understanding that this included ongoing medical cover until he was aged 85 years or passed, whichever came first. The defendant in their response, notes that Cathal had not been able to return to work full time work and by March 2007, questions of how his ongoing income would be met had been raised:
‘On 16 March 2007, Ms Kondakova emailed Ms Matthews and stated (in relevant part) “Cathal continues to hold the position of the CIS CFO. Currently Cathal is attending extensive physiotherapy sessions on a daily basis. His current workload is adjusted on the basis on [sic] his physical abilities. Cathal continues to receive his full pay at the moment. It remains to be decided how Cathal’s financial arrangements will be handled in the future.’ ”
This does not suggest that Cathal would be capable of working full time again within any foreseeable future. It must have been apparent to all that earning full remuneration for a role only partially filled was unsustainable, not the least to Cathal. It’s little wonder that he sought legal advice about moving from his role as a partner and logic would suggest that he also would seek to ensure ongoing medical cover as part of his exit from the partnership.
Fox Williams argues at paragraphs 20 & 21 of their statement that it was not instructed by Cathal to act on his behalf regarding the resolution of concerns about his TLD cover and yet, they were acting for him in matters regarding the AD&D policy. Whilst the policies were separate, the question must be asked as to why Cathal would not have asked his lawyers to consider all the policies at once. Commonsense would suggest that if you have engaged lawyers to guide you through messy partnership and insurance issues worth a large amount of money, you would instruct them to consider the best possible outcome by reviewing all of the intertwined matters and material, especially the insurance policies. Lawyers may mould truths, but accountants crunch dollars and executive such as Cathal should have been aware of the best possible means in which to apportion his limited resources.
It is for the court to determine who is telling the truth in these matters. However, Fox Williams admit at paragraphs 32 to 36, regarding confusion between not only of the two TLD insurers, but also confusing the AD&D policy with the two TLD contracts. Cathal’s statement notes that ‘… the Defendant’s invoice dated 29 May 2007 shows that on 22 May 2007 … Mr Custance spent 30 minutes “reviewing …policy documents re entitlement to disability benefits.” ‘ Fox Williams counter this in their response at paragraph 50 as an error on the invoice.Such lack of clarity regarding the policies under consideration raises questions regarding any advice that may have been afforded to Cathal.
Communications between Cathal and his solicitor extended to early 2009. The statement of claim submitted to the court in Cathal’s application commencing civil proceedings against Fox Williams shows one of the earliest communications was a letter drafted on 16 March 2007 for Cathal by his solicitor, stating that:
“The Colonial/AGF policies… do not apparently provide AD&D cover for the shoulder and foot dismemberment which I have suffered.”
Yet, within the same statement, Cathal notes that barely ten weeks later, Colonial had sent Cathal a letter of rejection in which they noted that his injury met the definition of the term for disablement as stated within the policy:
“On 24 May 2007, two days after Mr Custance reviewed the Claimant’s entitlement to long term disability benefits, the Claimant emailed to the Defendant the rejection letter dated 13 April 2007 (the “Colonial Rejection Letter”) that he had received from Colonial. The Colonial rejection Letter accepted that Mr Lyons was disabled with effect from 17 June 2006, within the meaning of the Colonial LTD Policy.”
Cathal states that Fox Williams also negotiated the terms of the transition to the consultancy role in April of 2009. The LTD policy was subject to Bermudan law and it was imperative that the new contract included a clause specifying:
“… that English law and jurisdiction would apply, that the Claimant had a right to CIGNA Medical Insurance for the rest of his lifetime as well as an ongoing part-time consultancy role an a cash payout.”
The inclusion of the English law clause would have protected Cathal’s ongoing medical insurance beyond 2011 when the consultancy ended. It’s omission meant that upon his departure from his consultancy role he was advised that his CIGNA medical insurance had also immediately ceased. Fox Williams deny that such a clause was in any draft of the severance of the partnership agreement (paragraph 83) and in fact that they had only limited involvement in the negotiations for Cathal’s departure, odd given that this was in large part why Cathal had engaged their services.
Under the terms of the AD&D policy, Cathal understood that he should have been entitled to an immediate payment of $500,000 due to the loss of part of his right foot and in 2011 he was still attending physiotherapy appointments three days per week. Yet, the funds were not paid until August of 2012 after he asked the firm SGH Martineau LLP to take over as his legal counsel, Cathal having lost faith in Fox Williams. The compensation did not take allow for loss of interest accruals that could have been assumed had the money been invested since the time of his disablement. The lack of those funds for those six years and particularly after his medical insurance was severed when his consultancy role ended, placing undue stress upon both Cathal and his family.
Cathal knew when submitting his claim in 2014 that he would need further surgery to manage his injuries. As a permanently disabled and dismembered man with significant ongoing medical costs, no medical insurer would go near him. He was, quite simply, uninsurable. Left without medical insurance and unable to attain such due to the severity of his injuries that required ongoing treatment and with a family to continue to support, he has been left with no option other than to pursue a claim of negligence against the law firm that acted on his behalf after his accident. In the meantime has found himself reliant upon the goodwill of those around him, including his family, who are now rely upon their dwindling savings.
Cathal met the definition for Total and Permanent Disablement under the TLD policy. The failure to specify the jurisdiction in his new contract of employment proved to be disastrous. This combined with what Cathal believes to be failure to advise him of his entitlements under the TLD policy have denied him ongoing financial support that should have been paid until he was well into his dotage. If his claim succeeds, Cathal will be assured of at least some of the funds he needs to continue his rehabilitation. He never intended to be a burden to his family or community – all he wants is justice so that he can live as full a life as possible once again.