Big tobacco companies not required to deposit $1B, Court of Appeal rules - Action News
Home WebMail Monday, November 11, 2024, 04:57 AM | Calgary | -1.3°C | Regions Advertise Login | Our platform is in maintenance mode. Some URLs may not be available. |
Montreal

Big tobacco companies not required to deposit $1B, Court of Appeal rules

The Court of Appeal has ruled in favour of three big tobacco companies, saying that they are not required to immediately deposit $1 billion plus damages in a trust account for members of a class action lawsuit.

Imperial Tobacco, Rothmans Benson & Hedges, JTI-Macdonald had until July 26 to deposit sum

Canada's largest tobacco companies argued against having to make a $1B deposit to Quebec smokers who won a landmark class action lawsuit in June. (Graham Hughes/Canadian Press)

The Court of Appeal has ruled in favour of three big tobacco companies, saying that they are not required to immediately deposit $1 billion plus punitive damages in a trust account for members of a class action lawsuit.

In June, aQuebec Superior Court judge ruled that the three tobacco companies Imperial Tobacco, Rothmans Benson & Hedges and JTI-MacDonald owed $15 billion in damages to Quebec smokers who either became addicted to cigarettes or who became gravely ill from smoking.

The judge who heard the two merged class action lawsuits, which was touted as the biggest civil case in Canadian history, ruled that the companies would have 60 days to deposit $1B plus damages in a trust accountregardless of whether or not they would appeal the verdict.

The provisional amount was to ensure that those who became ill due to smoking would benefitwhile an appeal, which would take years, wound through the legal system.

But on Thursday afternoon, Quebec's highest court ruled that the reasons the trial judge gave to justify why the tobacco giants should set that money aside were inadequate.

"We consider the justification for a provisional execution weak," the ruling said.

Lawyers for all three firms argued earlier this month they simplydidn't have the funds to cover the $1.13 billion, saying it couldcause irreparable harm to their ability to appeal and even put themon the brink of bankruptcy.

They also argued the amount would not be recoverable if theyeventually won on appeal.

The appeal court touched on that point in its ruling.

"There is the nagging issue of reimbursement if appellantssucceed on appeal," the panel of three justices wrote.

"The potential necessity of seeking reimbursement of $10,000from each of 100,000 class members is by any objective standard aprejudice that cannot be ignored."

Imperial Tobacco issued a statement late Thursday afternoon, saying it was pleased with the outcome.

"Our arguments were heard, and our motion was granted. We knew all along that we had very strong grounds to appeal and today's unanimous decision confirms that there was no legal basis for ordering the provisional execution," said Tamara Gitto, vice-president of Imperial Tobacco Canada.

Now the tobacco companiesawait a decision regardingan appeal ofthe verdict that orders them to pay $15.6 billion in punitive and moral damages to more than one million Quebecers.

"It is unjustified to hold legal manufacturers responsible for the personal choices of adult consumers and we will continue to defend our position vigorously as we continue our appeal of the overall judgment,"Gitto said.

With files from The Canadian Press