Record $5M in damages awarded in worker's insurance claim

A welder hurt on the job working for a subsidiary of a Saskatchewan company has been awarded $4.95 million in compensation to be paid by two insurance companies who were found to have acted maliciously in handling his claim, a judge has ruled.

AIG and Zurich ordered to pay millions for 'malicious' acts on worker's insurance claim

Centerra Gold owns the Kumtor mine in Kyrgystan where Luciano Branco was injured on the job. (Centerra)
Welder Luciano Branco spent years battling insurance companies over coverage for a work-related injury. (Courtesy Alex Kotkas)

A welder hurt on the job working for a subsidiary of a Saskatchewan company has been awarded $4.95 million in compensation to be paid by two insurance companies who were found to have acted maliciously in handling his claim, a judge has ruled.

Luciano Branco was awarded aggravated damages of $450,000 as well as $4.5 million in punitive damages to be paid by the insurance firms AIG and Zurich.

Branco's lawyer told CBC News the award is the largest of its kind imposed by a Canadian court against insurance companies.

Alex Kotkas said his client endured significant financial hardships while the insurance companies resisted paying — or simply ignored — his claim for ten years.

"Mr. Branco was starving," Kotkas said. "He was unable to even buy his own clothing. At the trial, he was wearing clothing that was handed down to him by his son."

According to the court decision, Branco, now 62, was injured on Christmas Day in 1999 while working for Kumtor Operating Co. at a gold mine in Kyrgyzstan. The company was a subsidiary of Saskatchewan-based Cameco Corp.

Alex Kotkas, lawyer for the injured worker, says his client was in dire financial straits while fighting the insurance companies. (Supplied to CBC)

A heavy steel plate fell on his foot, but Branco finished his shift and packed his foot with snow to relieve the pain.

The injury was aggravated a few weeks later and he took time off work to get medical attention.

Branco is a Canadian citizen with roots in Portugal and was living in Portugal at the time of the accident.

He found his local doctors were not able to treat the injury and in June of 2000 he went to the company doctor for an assessment.

That's when the injury was formally reported to the company and, when it was determined to be work-related, the insurance companies began to be involved.

The breakdown of damages:


  • Aggravated damages - $150,000.
  • Punitive damages -  $1.5 million.


  • Aggravated damages - $300,000.
  • Punitive damages - $3 million.

However, dealing with the insurance companies proved to be a difficult matter as Branco was confronted with delays and outright refusals to pay anything, despite repeated medical reports that he had suffered a genuine permanent injury.

"This court cannot imagine more protracted and reprehensible behaviour than that of Zurich in blatantly refusing to pay what had been owed in monthly payments for almost eight years (10 years from the date of the accident)," the judge on the case said in his ruling. "This failure to pay and continual court applications instigated by Zurich with no reasonable justification were nothing short of torturous on Branco."

The judge had similarly harsh words for AIG, describing its actions as "calculated and abhorrent."

According to the judgment, AIG deliberately used a number of tactics to avoid paying Branco's claim.

Stern words from judge

"These acts were malicious and designed to leverage a reduced settlement of the claim," the judge said in awarding damages.

"The actions of AIG and Zurich establish a pattern of abuse of an individual suffering from financial and emotional vulnerability," the judge added.

Neither company provided comment to CBC News on the case.

Responses from the insurance companies:


"This is a matter currently before the courts.  It's our policy at Zurich not to comment on any ongoing litigation."

 — Steve McKay, media and public relations director for Zurich in North America.


"AIG has no comment on this." 

— Jerri Cairns, lawyer for AIG.

Branco's lawyer said the judgment, while substantial for his client, would hardly be felt by the insurance companies.

"The judgment amount, even though it might appear large by average standards, will have almost no impact on these enormous insurance companies," Kotkas said.

The financial toll on Branco and his family was substantial, he said, while the insurance claim went unpaid.

They survived on family loans.

His lawyer said his client went from a proud, athletic and hard working individual to a man who felt ashamed and suffered acute mental distress.

In addition to the damages award, the insurance companies were ordered to pay monthly wage replacements to Branco, until he turns 65.

The judge said the mining company Branco worked for had treated him fairly, and only the insurance companies were liable for the damages.

Kotkas said he expected the insurance companies will appeal the decision.