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TLPJ Wins Decisive Victory on Behalf of Disabled Business Owner Against Lloyd’s of London 

CA Appeals Court Slams Insurance Giant’s Effort to Force Arbitration as Illegal Denial of Right to Day in Court

Lloyd's of London building, designed by Lord Rogers (BBC photo). Lloyd's of London building, designed by Lord Rogers.

The California Court of Appeal recently ruled that Lloyd’s of London – the world’s oldest and largest insurance exchange – could not force a self-employed plumbing contractor to arbitrate his claim for bad faith denial of disability insurance benefits. Trial Lawyers for Public Justice (TLPJ) represented plaintiff Antone Boghos on the appeal, successfully arguing that Lloyd’s disability policy should be interpreted to preserve the policyholder’s access to court and that the arbitration clause is illegal because the high costs involved would force the policyholder to give up his claims altogether.

"Lloyd’s of London cannot force an out-of-work policyholder to forfeit his right to sue and on top of that pay staggering arbitration costs to challenge the denial of disability coverage," said TLPJ Staff Attorney Michael J. Quirk, who argued the appeal in San Jose, California on March 11, 2003. "The Court was absolutely right to prohibit Lloyd’s from saddling the policyholder with enormous arbitration expenses."

The American Arbitration Association’s (AAA’s) Commercial Arbitration Rules selected by Lloyd’s would have required Boghos to pay thousands of dollars in arbitration-related costs, including half of AAA’s $11,000 case filing and servicing fees, $150 to $250 per day in hearing fees, travel costs to and from Los Angeles, and half of the arbitrators’ fees of $350 to $500 per hour for up to seven hearing days before a one or three-arbitrator panel.

TLPJ Staff Attorney Michael J. Quirk Michael J. Quirk

Robert H. Bohn, Sr. Robert H. Bohn, Sr.

"The Court’s ruling sends a strong message to insurance companies that they cannot evade responsibility for their misconduct by inserting unconscionable arbitration clauses in their contracts," said lead counsel Robert H. Bohn Sr. of Bohn & Bohn, L.L.P. in San Jose. "If Lloyd’s had prevailed, then insurance companies could easily strip business owners of the right to have their day in court."

Bohn filed suit in the Superior Court of the State of California, Santa Clara County, in November 2001 on behalf of Antone "Tony" Boghos, who owned a plumbing business in Milpitas, California. The complaint stated claims for bad faith denial of insurance, breach of contract and implied covenant of good faith and fair dealing, and intentional infliction of emotional distress.

In 1998, Boghos took out a long term disability insurance policy with Petersen International Underwriters, to be underwritten by Lloyd’s of London. The policy took effect in January 1999, guaranteeing Boghos a monthly payment benefit if he sustained accidental injuries rendering him unable to perform his job. Lloyd’s Certificate of Insurance specified that if the policyholder were denied coverage, he could sue, and the insurer agreed to "submit to the jurisdiction of a court of competent jurisdiction within the United States."

In May 2000, Boghos suffered a traumatic blow to the back of his head and neck, knocking him unconscious. As a result of injuries sustained from the accident, Boghos suffers vertigo and headaches, loss of concentration and diminished physical strength, leaving him unable to perform his work duties. Nevertheless, in December 2000, Boghos received a letter from Lloyd’s notifying him that they were discontinuing his disability payments. Eleven months later, he filed suit, and Lloyd’s moved to compel arbitration in February 2002. Bohn successfully opposed the motion in trial court, arguing that Lloyd’s and the other defendants had plainly consented to Boghos’ right to litigate failure to pay claims in court.

TLPJ took the lead on appeal, successfully arguing that the disability insurance policy did not require arbitration because it plainly stated that Boghos could go to court if Lloyd’s denied him benefits. TLPJ also prevailed on the argument that the arbitration clause was illegal because the exceedingly high costs involved would force Boghos to forfeit his claims altogether.

In addition to Quirk and Bohn, the plaintiff’s legal team includes TLPJ Staff Attorney F. Paul Bland, Jr. and TLPJ’s Power-Cotchett Fellow Kerry-Ann T. Powell. TLPJ’s brief and the Court of Appeal ruling in Boghos v. Lloyd’s of London, received by TLPJ on June 2, 2003, are posted on TLPJ’s web site,


Trial Lawyers for Public Justice is the only national public interest law firm dedicated to using trial lawyers’ skills and resources to advance the public good. Founded in 1982, TLPJ utilizes a nationwide network of more than 3,000 outstanding trial lawyers to pursue precedent-setting and socially significant litigation. It has a wide-ranging litigation docket in the areas of consumer rights, environmental protection, toxic torts, worker safety, civil rights and liberties, and access to the courts. TLPJ is the principal project of The TLPJ Foundation, a not-for-profit membership organization. It has offices in Washington, DC, and Oakland, CA. TLPJ’s State Coordinator for Northern California is Althea Kippes, tel. (415) 398-5054.


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