His uncle John Hamilton, an illegitimate son of his grandfather, the 1st Earl of Arran, was commendatory abbot of Paisley Abbey around the time of his birth. In 1553 this uncle succeeded David Beaton as Archbishop of St Andrews and agreed to pass the position as commendator to his nephew Claud, who was then about seven years old.
In 1562 his eldest brother, James, was declared insane. His father died at Hamilton on 22 January 1575. His brother James as the eldest inherited the title and estate but because of his insanity, John the second brother had to stand in for him. Then in 1579 the privy council decided to arrest both him and his brother, Lord John Hamilton , to punish them for their past misdeeds; but the brothers escaped to the Kingdom of England, where Elizabeth I of England used them as pawns in the diplomatic game, and later Claud lived for a short time in France. In April 1583 Claud was in exile in England at Widdrington Castle in Northumberland. He wrote to Queen Elizabeth and Frances Walsingham for aid for his expenses living in this "sober house" especially as his wife was soon to visit. Returning to Scotland in 1586 and mixing again in politics, he sought to reconcile James VI of Scotland with his mother; he was in communication with Philip II of Spain in the interests of Mary and the Roman Catholic religion, and neither the failure of Anthony Babington's plot nor even the defeat of the Spanish Armada put an end to these intrigues. In 1587 he was created a Scottish Lord of Parliament as Lord Paisley, when the abbey was erected as a barony. With this the Hamilton family gained a second seat in Parliament, the first being held by his elder brother John for his eldest brother James, during his insanity. This seat in the Scottish Parliament was occupied after his death by his grandson James, the 2nd earl of Abercorn and Lord Paysley became a subsidiary title of the earls, later marquesses and dukes of Abercorn, which was held by the heir apparent.
Illness, death, and timeline
In 1589 some of his letters were seized and Lord Paisley, as he was now, suffered a short imprisonment, after which he practically disappeared from public life. He suffered from mental illness in his later years. In November 1590 he broke down in tears after reading the Bible and it was thought he would not recover 'in regard of the infirmity haunting and falling on many descended of that house'. His eldest brother James Hamilton, 3rd Earl of Arran had been suffering from a mental illness since 1562. In 1598 he allowed James, his eldest son, styled the Master of Paisley, to act on his behalf with regard to all the affairs concerning the town. His wife died in March 1616. His son predeceased him in 1618. He died in 1621 and was buried in Paisley Abbey. He was succeeded by his grandson, James Hamilton, 2nd Earl of Abercorn.