Tobacco Giants Near $23.6 Billion Settlement in Landmark Canada Case
Three of the world’s leading tobacco firms are close to finalizing a multibillion-dollar settlement in Canada, potentially bringing an end to a long-running legal battle over the health risks of smoking. Philip Morris, British American Tobacco, and Japan Tobacco are set to pay C$32.5 billion (£18 billion; $23.6 billion) to Canadian smokers and health departments as part of a proposed settlement mediated by the courts.
The settlement follows nearly a decade of legal wrangling after a Quebec court ruling in 2015 found the companies had concealed the well-documented health hazards of cigarettes. The court concluded that the firms were aware of the links between smoking and cancer but had failed to properly warn their customers. This landmark decision forced the companies to place their Canadian branches into bankruptcy, leading to years of negotiations over compensation.
Under the proposed terms, the settlement would represent the first instance globally where litigation against major tobacco companies has resulted in direct compensation for victims. If approved, around C$6.5 billion would be allocated to smokers and their heirs who suffered from diseases like lung and throat cancer, with victims in Quebec set to receive roughly C$4 billion in recognition of their role in spearheading the lawsuit. The compensation for individuals could reach up to C$100,000, depending on the severity of their illness and their smoking history.
In addition, approximately C$24 billion would be distributed to government health departments over time to offset healthcare costs incurred due to smoking-related illnesses.
The case originated in 1998, when smokers and ex-smokers filed lawsuits against the cigarette manufacturers. The 2015 ruling required the companies to pay C$15 billion in damages, a decision upheld in 2019. Philip Morris, operating in Canada under Rothmans, Benson & Hedges, said that the voting process on the settlement will take place in December, with a court hearing expected in the first half of next year if claimants approve the plan.
Despite the substantial payout, some health advocacy groups expressed dissatisfaction with the settlement, arguing it does little to prevent future harm. In a joint statement, Smoking & Health, Physicians for a Smoke-Free Canada, and the Quebec Coalition for Tobacco Control stated, “The settlement provides no roadmap aimed at preventing these very same companies from causing more damage by recruiting new victims, including through new enticing nicotine gadgets.” They did, however, acknowledge that compensation for victims was a positive aspect of the deal.
The outcome of the settlement could set a significant precedent for future litigation against tobacco companies worldwide, especially as debates over corporate responsibility and public health continue.
