Canadian Manufacturing

Legal battle continues between smokers, tobacco companies and provincial govts [UPDATED]

Lawyers will ask the Ontario court to revoke creditor protection if they intend to appeal, as well as to prevent the companies from transferring profits abroad


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TORONTO – Lawyers representing Quebec smokers and provincial governments are in a Toronto court arguing against a ruling that suspended legal proceedings against three major tobacco companies.

The companies – JTI-Macdonald Corp., Rothmans, Benson & Hedges and Imperial Tobacco Canada Ltd. – were granted protection from their creditors last month after they lost an appeal in Quebec.

That province’s highest court upheld a landmark judgment ordering the companies to pay billions of dollars in damages to Quebec smokers.

The Quebec Council on Tobacco and Health led two class actions against the companies and won in 2015, with the court ordering the companies to pay more than $15 billion to smokers who either fell ill or were addicted.

Lawyers for the council are asking the Ontario court to revoke creditor protection for the companies if they intend to appeal to the Supreme Court of Canada. They say they will also ask the court to prevent the companies from transferring their profits abroad.

Mark Meland, who represents the Quebec class-action members, told the court the creditor protection is just the companies’ latest delay tactic in a legal battle that has already spanned more than two decades.

“This is just the same war of attrition they’ve been engaging in for 21 years,” he said.

If the case is allowed to stretch on for years longer, “there will not be one living member of the Quebec class action to receive compensation,” he said.

Meland said the companies cannot try to negotiate a settlement in good faith through the creditor protection process and at the same time pursue appeals that essentially contest the validity of their debts.

The tobacco giants should pick one avenue of recourse and allow the matter to reach a conclusion, he said.

Provincial governments have also sued tobacco companies in an effort to recover health-care costs associated with smoking, and those lawsuits have been suspended under the creditor protection order.

JTI-Macdonald has said it was forced to seek creditor protection to safeguard 500 Canadian jobs and continue its business with minimal disruption while it prepares to defend itself against the appeal court ruling.

News from © Canadian Press Enterprises Inc. 2019

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