Cardiologist Zev Lagstein developed heart disease, severe migraines and other neurological problems in 2001. Several physicians examined him and concluded the health issues permanently disabled him from practicing medicine. Following the diagnosis, Lagstein submitted a disability insurance claim to Lloyd's of London. His policy with Lloyd's was supposed to pay $15,000 per month for up to 60 months of disability.

By 2002, Lagstein had not received any benefits or even a decision on his claim. He was forced to go back to work, against his doctors' advice. After another year, Lloyd's still had not made a decision about the claim. He filed suit in the Federal District Court for the District of Nevada for breach of contract, among other things. Lloyd's compelled arbitration, based on the binding terms of Lagstein's insurance policy.