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Guarantee deposit of $4.3 billion demanded from tobacco companies to prevent them from escaping justice

6 October 2015

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 In July, the Québec Court of Appeal rescinded the order to pay the initial deposit, accepting the argument on the part of the tobacco companies that they would not be able to recover this sum if they won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.

Historic win for the Quebec class actions

1 June 2015

In a historic judgment made public this evening, Justice Brian Riordan of the Quebec Superior Court found in favour of two Quebec class actions against the three tobacco companies Imperial Tobacco, Rothmans, Benson & Hedges, and JTI-MacDonald. Justice Riordan ordered the three companies to pay more than $15 billion in moral and punitive damages to almost 100 000 Quebec smokers and ex-smokers who developed emphysema, lung cancer, or throat cancer. The three companies, who “chose profits over the health of their customers” (1), must make an initial deposit of over $1 billion in the next 60 days, whether or not the matter is appealed, in order to compensate the victims according to parameters that will be determined by the Court. “Today marks an important day for the victims of tobacco who have waited almost 17 years for this moment”, said Mario Bujold, Executive Director of the Conseil québécois sur le tabac et la santé (CQTS).

In his judgment of 276 pages, Justice Riordan notably declared that the companies violated:

  1. their general duty not to cause injury to another;
  2. their manufacturer’s duty to inform their clients of the risks and dangers of their products;
  3. the rights to life, personal security, personal inviolability and dignity protected by the Quebec Charter of Human Rights and Freedoms;
  4. their manufacturer’s obligation not to hide the truth from or mislead their clients concerning their products under the Quebec Consumer Protection Act.

Imperial Tobacco’s Greater Responsibility

Among the three companies sued, the judge blamed Imperial Tobacco most severely (ITL): “our analysis of the Companies’ activities over the Class Period underlines the degree to which ITL’s culpable conduct surpassed that of the other Companies […]. It was the industry leader on many fronts, including that of hiding the truth from – and misleading – the public”.(2)

In light of its behaviour, ITL must assume 67 % of the moral damages, a higher proportion than its market share. For their part, Rothmans, Benson & Hedges was held responsible for 20 % of the moral damages and JTI-MacDonald 13 %.

The Claims of the Two Class Actions

The decision rendered today concerns two class actions that were heard as part of the same trial. The Conseil québécois sur le tabac et la santé and Jean-Yves Blais (CQTS-Blais) class action included 99 957 Quebec smokers and ex-smokers who developed emphysema, lung cancer, or throat cancer; the Cécilia Létourneau class action included 918 218 persons addicted to tobacco in Quebec.

Both class actions were granted but only the CQTS-Blais members will receive compensation. Justice Riordan awarded $131 million in punitive damages to the Létourneau class action, which works out to $130 per member, an amount that the judge ruled to be impossible or too expensive to distribute individually. (3) For their part, the CQTS-Blais class members are entitled to receive $80, 000 or $100, 000 for lung or throat cancer and $24, 000 or $30, 000 for emphysema, plus the interest accumulated since 1998.


(1) Para. 239 of the judgment.

(2) Para. 1009 of the judgment.

(3) Summary of the Judgment (p. 10).

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