A Saskatchewan justice has smacked two large insurance companies with the largest punitive damages award in Canada for what the court referred to as “abhorrent” treatment of an injured worker.
Zurich Life Insurance Co. was ordered to pay $3 million for punitive damages and $300,000 in aggravated damages while AIG will have to pay $1.5 million in punitive damages, and $150,000 in aggravated damages for their respective roles in which they were found to have refused to pay workers’ compensation payments to a 62-year-old “sought-after, highly-trained” welder, Luciano Branco. At the same time the insurance companies were hit, charges against Branco’s employer, mine owner Cameco Corp., were dismissed.
Back in Dec. 1999, while Branco was working as a welder at a Cameco Corp. gold mine, he dropped a steel plate on his foot. He finished his shift, and covered his foot in snow to relieve the pain. He neither reported the injury nor stopped working, even when he re-injured the same foot in February 2000. Finally, in June 2000, the injury was reported to the company.
After surgery failed to repair the damage to the foot, AIG received two reports informing them that Branco was permanently disabled, including one from a doctor AIG itself had referred. AIG made a settlement offer in July 2001 of $22,500, which Branco rejected. Following that, Branco then saw a specialist, who confirmed the disability, although AIG continued to withhold payments, and even cut them off twice without explanation.
Though according to his disability report, he was unable to work on ground that wasn’t even and level, AIG tried to rehabilitate him gardener at a facility that was three hours from his home, and they threatened to cut off his benefits if he balked at taking the job, or find job re-training on his own. Even though he reported to Saskatchewan WCB for physical rehabilitation and job retraining, AIG cut off payments to Branco for good in 2004, and received no payments until days before the trial started in August 2012, when they suddenly paid him all the money they owed him.
This isn’t the first time AIG has done this sort of thing. In May 2003, they were accused of much the same thing at the same gold mine, and by the same adjuster on the same policy, and were forced to pay $60,000 in punitive damages. were awarded against the company in a case that involved the same gold mine, the same policy and the same adjuster.
In the court’s ruling, the Justice said, “The cruel and malicious acts of AIG and Zurich combined with the previously ignored award of punitive damages against AIG is evidence of how calculated and abhorrent the actions of AIG were in dealing with Branco. … The court is cognizant of the fact that a punitive damages award of $3 million may not be particularly significant to the financial bottom line of a successful worldwide insurance company. It is hoped that this award will gain the attention of the insurance industry. The industry must recognize the destruction and devastation that their actions cause in failing to honour their contractual policy commitments to the individuals insured.”