Three cigarette manufacturers obtain creditor protection in $15B lawsuit
Rothmans, Benson & Hedges has become the third tobacco company to receive a temporary reprieve from compensating 100,000 Quebec smokers after securing creditor protection in an Ontario court on Friday.
Imperial Tobacco Canada and JTI-Macdonald Corp. were both granted creditor protection earlier this month.
The three companies lost an appeal of a landmark $15-billion class-action lawsuit in the Quebec Court of Appeal on March 1.
Rothmans, Benson & Hedges said in a statement that the Ontario Superior Court has stayed legal proceedings against all three companies until April 4-5.
The Quebec Council on Tobacco and Health led two class actions against the companies and won in 2015, when Quebec Superior Court Justice Brian Riordan ordered the companies to make payments of more than $15 billion to smokers who either fell ill or were addicted.
At the time, the ruling was believed to be the biggest class action award in Canadian history.
The tobacco company's managing director said the creditor protection could provide an opportunity for the company to resolve all the pending Canadian litigation against it.
"While RBH disputes liability in the Canadian litigation given the widespread awareness of the health risks of smoking, we are optimistic about reaching an arrangement that could resolve all pending litigation and allow RBH to focus on the future," Managing Director Peter Luongo said in a statement.
A spokesman for the Canadian Cancer Society accused the companies of seeking a "sweetheart settlement" that would allow them to avoid paying the bulk of the damages.
"The tobacco industry has engaged in decades of wrongful behaviour that has caused disease and death on a massive scale," Rob Cunningham said in a statement.
"Court judgments in Quebec have been highly critical of the tobacco industry and have ordered the companies to pay billions of dollars. Now the companies are trying to avoid paying what they have been ordered to pay."