Not sure about Malady's intervention in Lohse's quest: I suspect that one may have some wrinkles that still need to be ironed out.
Well, I had save, so since I noticed there is a problem with solving this quest, I did reload and went exploring and doing other quests in Arx.
So, quest was not started, and after doing other things (like secret of dwarves), I still can hear Lord talking with his victim.
I read that after I discover the truth about him, then I will face him.
In fact, before I was starting to read and after I went to do other things, I was hoping that I will find something that may help except persuade or force.
Now I wonder, what will happen if you do not start execution quest and discover the truth first.
I guess that developers did not predict such case, because Lord has primary red flag and is most close located when reaching Arx, so player should encounter him first and decide execution quest, before will go doing other things and discover something.
As about Malady, I hope it is like with Gareth.
I also did everything with Gareth family quest (talked with parents, found gloves, did revenge, got ring) and was not able to get new dialogue options, so he stayed digging and I moved to isle.
I was able to find him there.
So, I hope that when time will come, Malady will be able to talk with me about new things just like I would not complete doctor quests, because it was optional and I guess not related to main or her quest.
What is a name of the quest that Malady metioned she will need help?
Maybe I will focus on it now to see what will happen, before doing other.