The article below obtained from the Northern Miner, April 24th, once again demonstrates the deceptive practices of insurance companies who collect premiums on the basis of false advertising and then fail to honor their obligations to the patient. When will our politicians take note and rectify these serious problems?
Luciano Branco’s long and soul-destroying battle with insurance firms AIG and Zurich has finally reached some satisfaction in the courts, with a Saskatoon judge awarding the injured Portuguese-Canadian welder $450,000 in aggravated damages and $4.5 million in punitive damages. It’s the largest award of its kind ever given by a Canadian court against insurance companies.
Branco, now 62, immigrated at age 24 to Canada, where he learned to weld and worked out West and up North. In 1994 he moved back to Portugal, and by 1997 was working at Cameco-subsidiary Cameco Gold’s (now Centerra Gold) huge Kumtor open-pit gold mine in Kyrgyzstan.
During a 12-hour shift on Dec. 25, 1999, he dropped a steel plate on his foot. He finished his shift, packed his foot in ice, and returned to Portugal at the end of his 28-day rotation to recuperate. Towards the end of his next rotation, he stepped on a piece of steel and reinjured his foot, and then sought medical treatment in Portugal, missing his next rotation.
He only reported his injury to the Kumtor operating company on his next rotation in June 2000, when he did not work at the camp. Kumtor continued to pay his base salary of $51,920 to the end of his contract in March 2001 (in fact, overpaying him $12,000 by mistake).
Anxious to get back to work, Branco had surgery on his foot in January 2001, but it was unsuccessful. Despite physiotherapy and rehabilitation treatments, Branco’s Portuguese doctor determined that he was permanently disabled and in chronic pain, a prognosis repeated many times in the following years by specialists in Canada.
American Home Assurance Co. (AIG) was advised of Branco’s work-related injury in mid-2000, which triggered the Saskatchewan Workers’ Compensation Board-equivalent claim handled under the AIG policy. His long-term disability benefits were covered by Zurich Insurance.
To make a long story short, AIG and Zurich refused to pay out the benefits owed to Branco, hoping the outrageously long delays, transcontinental complexities and non-stop legal bills would grind him down and force him to accept a much lower settlement.
In the recent judgment, Justice Murray Acton found that AIG and Zurich had acted in a “cruel and malicious” manner towards Branco for more than a decade, offering him “ridiculously low” settlements, including AIG initially offering him a cash settlement of just US$22,500. AIG didn’t make some of its payments owed to Branco until the day of the trial.
Zurich, for its part, internally approved Branco’s long-term disability payment in 2002, but never informed Branco, who didn’t receive his first funds from Zurich until 2009 and had turned down Zurich’s settlement offer of $62,900, minus $9,000 in legal costs in April 2003. “This court cannot imagine a 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,” Acton writes in his decision. “The actions of AIG and Zurich establish a pattern of abuse of an individual suffering from financial and emotional vulnerability.” (The judge said that the mining company had treated Branco fairly, and only the insurance companies were liable for damages.)
The judge noted that prior to his injury, Branco was a “proud, athletic and hard-working individual” who was “warm, friendly and sensitive” and an “excellent employee” at Kumtor. After the injury and the withholding of benefits, however, he had become a “demoralized man full of sadness and loss of pleasure,” and an individual “full of anxiety and depression.”
The insurance companies, Acton writes, “virtually destroyed Branco’s life over the last 13 years,” causing his marriage to break down and financial burdens to be placed on his daughter and other family members, and his legal representation. The judge writes that the insurance companies tried to use Branco’s diminished life to “gain leverage” over him and force him to accept a low settlement.
“That Branco was able to continue to withstand this pressure for so many years from two different fronts is truly remarkable and almost superhuman, even though his resistance may have resulted in irreparable mental distress, which may last for the remainder of his lifetime,” Acton writes. “The question remains: how many individuals have been unable to withstand the financial and psychological pressure of these tactics?”
The insurance companies are expected to appeal the decision.