Three large tobacco companies are set to pay $32.5-billion to settle legal claims, including a landmark 2015 Quebec court judgment that concluded the companies did not warn their customers about the dangers of using their products.
Thursday’s deal, which requires several more significant steps, vaults a legal odyssey that stretches back more than a quarter century toward a final conclusion. It was a battle at the intersection of complicated legal and philosophical questions: corporate responsibility when selling a legal and widely available product; individual choice and addiction; and the funding of public-health care as governments collect taxes from tobacco sales and corporate tobacco profits.
Of the total settlement, JTI-Macdonald, Rothmans, Benson & Hedges, and Imperial Tobacco Canada are initially set to pay $12.5-billion upon implementation of the plan. The three companies have been in bankruptcy protection, under the federal Companies’ Creditors Arrangement Act, since 2019, shortly after the Quebec Court of AppealMost creditors have already expressed formal support for the plan. A final vote on the deal is expected by Dec. 12.
The roots of Thursday’s deal between the companies and creditors reach back to the late 1990s, when class-actions lawsuits were launched, as well as British Columbia’s move to become the first province to try to recover health care costs from tobacco companies. All other provinces followed.