Guarantee deposit of $4.3 billion demanded from tobacco companies to prevent them from escaping justice
After winning its case against three tobacco companies, the Québec class actions today argued before the Québec Court of Appeal that a guarantee deposit of $4.3 billion should be remitted, while waiting for the courts to rule on the merits of this file. “We’re asking for this guarantee deposit in order to avoid a scenario whereby the victims end up nothing because the tobacco companies transfer abroad the hundreds of millions of dollars in profits they record each year,” explained Mario Bujold, executive director of the Québec Council on Tobacco and Health, the organization representing the 100,000 Quebecers living with lung or throat cancer, or emphysema.
The motion defended comes four months after the Superior Court of Québec awarded $15 billion to two class actions, with the first deposit of $1.131 billion due within 60 days. In July, the Québec Court of Appeal rescinded the order to pay the initial deposit, accepting the argument on the part of the tobacco companies that they would not be able to recover this sum if they won their appeal. The tobacco companies had also pleaded an inability to make the billion-dollar first payment, providing financial statements in support of their argument.
Lawyers for the victims are demanding that Imperial Tobacco and Rothmans, Benson & Hedges provide, within 30 days of the ruling, letters of credit totalling $4.3 billion issued by a chartered Canadian bank, or letters of credit totalling $217 million for each quarter, up to a total amount of $4.3 billion. In either case, the amounts will have to be placed in a trust account so that they can be recovered by the party that wins the appeal.