Toronto Litigators Successful In Overturning High Punitive Damages Award

The Saskatchewan Court of Appeal recently set aside the largest punitive damages awards ever made against insurers in Canada in Zurich Life Insurance Co. v. Branco. The Court of Appeal decision resulted in a 90% reduction of the $1.5 million award against American Home Assurance Company (AIG).

In Branco, the Court of Appeal conducted a detailed assessment of the facts and reiterated the importance of trial judges considering and analysing the specific terms of an insurance policy and the respective obligations of both the insurer and insured. Trial decisions like Branco that fail to do so and analyze and refer to the underlying policy terms in "only the most general of terms" are vulnerable to being overturned on appellate review. The Court of Appeal also reinforced the applicable legal standard and principles for awarding punitive damages.