Tobacco giants to pay C$32.5bn in landmark Canadian lawsuit settlement
Philip Morris, tobacco brand says the issuance of settlement amounts between parties is unresolved.
Philip Morris, British American Tobacco, and Japan Tobacco have agreed to a historic C$32.5 billion ($23.6 billion) settlement to resolve a long-standing tobacco lawsuit in Canada, according to a statement from Philip Morris on Friday.
The settlement, proposed by a court-appointed mediator, marks one of the largest of its kind outside of the United States.
Background of the Case
The legal battle dates back to 2015, when a Quebec court awarded damages to approximately 100,000 smokers and ex-smokers.
The plaintiffs argued that the tobacco companies were aware of the harmful effects of their products, including cancer and other serious health issues, as early as the 1950s. They also claimed the companies failed to provide adequate warnings to consumers.
Following an appeal, the Quebec court in 2019 upheld the decision, forcing the Canadian subsidiaries of Philip Morris, British American Tobacco, and Japan Tobacco to pay around C$15 billion in damages.
In response, the companies’ Canadian units sought bankruptcy protection and entered a court-supervised mediation process to negotiate a possible settlement.
Largest Settlement of Its Kind
If approved, the C$32.5 billion settlement would be the largest of its kind outside the U.S., noted Jacob Shelley, co-director of the Health Ethics, Law and Policy Lab at Canada’s Western University.
However, key issues regarding the allocation of the settlement amount between the tobacco giants remain unresolved, Philip Morris stated.
Despite these outstanding matters, Philip Morris CEO Jacek Olczak expressed optimism about concluding the legal process soon.
“We are hopeful that this legal process will soon conclude, allowing RBH (Rothmans, Benson & Hedges) and its stakeholders to focus on the future,” Olczak said.
This settlement could bring an end to the prolonged legal battle that has placed significant financial pressure on the Canadian subsidiaries of the three tobacco companies.