TORONTO — Lawyers representing Quebec smokers and provincial governments are pushing back against an Ontario court 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 say they will ask the Ontario court Thursday to revoke creditor protection for the companies if they intend to appeal to the Supreme Court of Canada. MORE
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Japan Tobacco Inc.’s Canadian unit was granted creditor protection by the Ontario Superior Court after a legal defeat over the risks of smoking threatens the existence of tobacco companies in the country.
The court extended protection in favor of JTI-Macdonald Corp. after the company argued that the damages award in the case of up to 1.77 billion Canadian dollars ($1.32 billion) exceeded its capacity to pay, Japan Tobacco said in a statement. JTI-Macdonald filed for protection from its creditors on March 8.
The Canadian units of British American Tobacco PLC, Philip Morris International Inc. and Japan Tobacco were ordered earlier this month to pay damages initially estimated at about CA$17 billion after losing an appeal over class actions filed by Quebec smokers. The total industry liability was later estimated at CA$13.5 billion. British American Tobacco said the ruling will hit its profit and set aside CA$758 million to cover damages, while Philip Morris cut its 2019 outlook.
JTI-Macdonald said the protection against creditors was its best option allowing it to continue doing business. The company said it will also proceed with an appeal to the Supreme Court of Canada.
While this case poses a risk, the industry faces even bigger headaches in Canada, where the country’s provinces are also suing the tobacco industry to recover health care costs. Ontario alone is claiming damages of CA$50 billion. MORE