In Canada, negotiations with tobacco manufacturers are being carried out to the detriment of public trials

Three Canadian health associations are warning about the ongoing negotiations surrounding the lawsuits brought by Canadian provinces against tobacco companies. The latter are hoping for a lump sum settlement in order to avoid a fine of 500 billion Canadian dollars (345 billion euros).

On the occasion of National No Tobacco Week, representatives from the Canadian Cancer Society, the Canadian Lung Association and Heart & Stroke have once again joined forces to challenge public opinion on one of Canada's legal cases of the century.

The ten provincial governments of Canada have in fact initiated, more than twenty years ago, lawsuits against tobacco companies for health costs caused by their business practices. After several years of litigation, the companies are now seeking to negotiate a settlement agreement behind the scenes with governments, similar to the one concluded on November 23, 1998 with the United States government. Health associations believe that this fundamental debate should instead be held in the open.[1].

Long-running trials

In March 2019, three Canadian tobacco majors – Imperial Tobacco (ITL), Rothmans, Benson & Hedges (RBH) and JTI-Macdonald (Japan Tobacco International) – were fined CAD 13 billion (€9 billion) on appeal. They then declared insolvent under the Companies' Creditors Arrangement Act (CCAA). As a result, similar trials in other provinces have also been frozen, with the tobacco companies stating their intention to reach a "global settlement", similar to the 1998 U.S. litigation. This freeze also applies to other claims that may come from consumers or growers, and also covers other nicotine products, such as e-cigarettes, their hardware and their e-liquids.

Since 2019, the application of this court decision has been postponed nine times, with the current period running until March 31, 2023. Two class action lawsuits (class actions) were initiated in 1998 by the Quebec government on behalf of the 100,000 Quebecers who died from tobacco between 1950 and 1998; the British Columbia procedure was initiated in 2001. Only one of the trials in Quebec has so far been completed. Unlike the Quebec trial, which targeted local distributors, the trials brought by the Canadian provinces involve the parent companies of national distributors and are, as such, much more formidable for tobacco multinationals.[2].

Fear of misuse of procedures

Health associations denounce the commercial attitude of the tobacco majors, who for decades lied to the public about the health dangers of their products, concealed internal studies, particularly on these risks, targeted adolescents, designed products specifically for women, spread misleading advertising and deceived the public with claims such as "light" or "mild". They are now drawing attention to the secret nature of the ongoing negotiations, in contradiction with the precepts of the Framework Convention on Tobacco Control (FCTC). Since 2019, nothing has leaked on this subject, the only information made public being limited to requests for delays from the cigarette companies and the holding of a meeting in January 2020, the date of which has not been revealed.

The associations are calling for a public debate so that these trials are accompanied by new measures to reduce smoking, while preventing these companies from repeating the same scenario with other nicotine products. Health stakeholders also want the money collected not to be used only to supplement provincial budgets or to enrich law firms, which are often paid a percentage of the sums obtained. New Brunswick has thus advanced an advance of 18 % on the expected sums, while Newfoundland and Labrador have agreed to pay 30 % of these sums to their law firms.[3].

Among the measures requested by health associations are, firstly, long-term funding for anti-smoking actions and the creation of an independent foundation to manage these issues, on the principle of the Truth Initiative in the United States after the 1998 agreement. The end of operations promoting all tobacco products and the publication of all internal documents of these manufacturers are also required in order to correct the behaviour of the tobacco industry.

Keywords: Canada, lawsuit, lump sum settlement, ITL, RBH, JTI.

M.F.

[1] Seale A, Dean T, Roth D, Historic lawsuits against tobacco industry must prioritize measures to reduce tobacco use, LinkedIn, published November 17, 2022, accessed January 27, 2023 (first published June 2021)

[2] Margoc H, The Canadian tobacco litigation: Imperial Tobacco, Rothmans, Benson & Hedges and JTI-Macdonald under creditor protection, Norton Rose Fulbright, published July 2019, accessed January 30, 2023.

[3] Canada's Tobacco Companies and their use of Insolvency Protection, Physicians for a Smoke-free Canada, press release, published September 2022, accessed January 30, 2023.