The biggest news in sport last month must be the fallout from the Lance Armstrong doping scandal. As reported in our September edition of #*IT Happens, Lance Armstrong was stripped of his seven Tour de France titles and disqualified from competition for life by the US Anti Doping Agency (USADA). USADA had laid charges against Armstrong for the possession, trafficking, use and distribution of performance enhancing drugs including EPO [erythropoietin], blood transfusions, testosterone, cortisone and HGH [human growth hormone] during the period between 1996-2005.
Well now insurance companies are taking legal action against Armstrong to repossess $12 million paid to him in bonuses he collected over his career.
As reported on website news.com Dallas insurance company SCA Promotions has sought back bonus money and indicated that they may also seek other legal sanctions and penalties against the US cyclist. The potential legal action could come in connection with Armstrong’s false testimony during an arbitration hearing in 2005-2006.
A lawyer representing the insurer confirmed SCA was seeking $7.5m paid out to Armstrong after a 2006 arbitration proceeding, which included a $5m bonus as well as interest and legal fees.
During Armstrong's career of competing for the US Postal Service team, the parent company Tailwind Sports took out a policy with SCA Promotions to cover bonuses paid to Armstrong for his Tour de France wins.
The insurer withheld a $5m bonus due after Armstrong's sixth Tour de France win in 2004 because of doping allegations. Following this, Armstrong took them to court and won because the original insurance contract did not stipulate any conditions about doping. It is unknown as to the detail of subsequent policies held and whether this latest legal action has a better chance of success.
Given Armstrong’s continued denial of any doping claims, this latest claim will undoubtedly be strongly contested in the courts.