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Court Says Lloyds of London Must Pay Legal Bills

March 16, 2010 | Posted in : Coverage of Fees, Defense Fees / Costs, Expenses / Costs, Fee Issues on Appeal, Legal Bills / Legal Costs

Reuters reports that a federal appeals court ruled on Monday that insurer Lloyd's of London must pay claims related to alleged swindler Allen Stanford’s legal defense.  The article, “Court says Lloyd’s Must Pay Stanford Legal Fees” reports Stanford and three former colleagues sued Lloyd’s after the firm stopped providing coverage under a directors and officers policy citing a money laundering exclusion.  The appeals court upheld the district court’s ruling that Lloyd’s must continue to pay costs and expenses that had been submitted by Stanford and his attorneys, but the U.S. Court of Appeals for the Fifth Circuit in New Orleans sent the case back to the U.S. District Court in Houston for additional arguments on the coverage question.  “The underwriters are enjoined from refusing to advance defense costs as provided for in the D&O policy unless and until the court ‘determines in fact’ by clear and convincing evidence…” that money laundering occurred, the ruling said.