Northampton brothers battle it out in court over £250,000 insurance payout

The older brother of a seriously ill Northampton dad will keep his £250,000 insurance payout after being cleared of "unjustly" profiting from his sibling's illness.

Friday, 5th May 2017, 12:10 pm
Updated Tuesday, 9th May 2017, 6:22 pm
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Duncan Frankland, 56, was running the family construction company with brother Clive, 54, when the younger sibling fell seriously ill in March 2014.

He had to give up work and they decided to cash in on one of the £250,000 insurance policies they had taken out against each other.

Clive said the purpose of the policy was to give his brother enough money to buy him out of the company in the event that he could no longer work.

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But by the time the claim was made on the policy, the company was no longer trading and Duncan refused to hand over the money.

It led to a court claim by Clive, which ended in defeat and an order that he pay more than £40,000 in lawyers' bills.

The judge, Mrs Recorder McAllister, said Duncan, of Long Buckby, was under no obligation to pay the £250,000 to his younger sibling.

Earlier, Central London County Court heard the parties had taken out £250,000 death and critical illness policies against each other.

But in 2003, in order to protect their positions, they took legal advice and came up with an agreement in the event one or the other fell ill.

Under the agreement, the ill brother would have the option of selling his shares in the company to the other in return for the £250,000 insurance money.

However, after the money was paid out to Duncan in November 2014, he refused to hand it over to his now disabled sibling.

Duncan said the option to exchange the shares for the insurance money was only an option and did not apply once the company ceased trading.

But Clive, of Harleston Road, Northampton, insisted that the money should have ultimately gone to him - because it is he who became critically ill.

"I thought he would walk away with the company and I would walk away with the money, because I couldn't work again," he said

"Had I thought for one moment that the proceeds were intended for Duncan, I wouldn't have completed the claim. Why would I?".

He added: "Duncan and I used to have a good working and family relationship, but this seems to have gone sour by his claim to keep the money.

"He hasn't talked to me since. He hasn't talked to my parents since."

Giving evidence, Duncan denied that he had received a "windfall" or that he had been "unjustly enriched" by keeping the money.

"The company had already ceased trading and therefore the agreement was null and void," he told the judge.

Giving judgment, the judge said there had been a "clear, unambiguous agreement" between the two brothers, which terminated when the company stopped trading.

Clive's option to swap his shares for the money paid to Duncan did not continue beyond the termination of the agreement, she added.

The judge ordered Clive to pay Duncan's costs of the county court hearing, which are expected to be more than £40,000.