Three tobacco giants are again seeking to extend an order suspending legal proceedings against them as they continue to negotiate a settlement with creditors in a process that has stretched more than five years. A smoker puts out a cigarette in an ashtray in Ottawa on May 31, 2016. THE CANADIAN PRESS/Sean Kilpatrick.
Three major tobacco companies are once again asking to extend a court order that halts legal action against them, as they continue negotiations over a settlement in a long-standing case. The case involves a ruling that requires them to pay billions to around 100,000 smokers and their families.
Court documents in Ontario reveal that JTI-Macdonald Corp., Rothmans, Benson & Hedges, and Imperial Tobacco Canada Ltd. are requesting the legal freeze to remain in effect until the end of March 2025. The hearing for the request, originally set for Tuesday, has been delayed to October 31. In the meantime, the stay of proceedings has been extended until that date. It had been scheduled to expire this Monday.
Health advocacy groups are growing frustrated with the delays and the lack of transparency in the case. They worry that provinces might miss a crucial opportunity to enforce stricter regulations and implement smoking reduction strategies.
Rothmans, Benson & Hedges managing director Milena Trentadue stated in a court affidavit that progress has been made on several issues during mediation. However, key matters still need resolution before any global settlement can be reached.
Trentadue explained that it's hard to estimate how much more time is needed, but at least six months, or possibly more, will be required to finalize the negotiations. The remaining steps include wrapping up the settlement talks, organizing a claims process, holding creditor meetings, and securing a sanction order to implement the plan.
The original stay of proceedings was granted in early 2019 after the companies lost an appeal in a landmark case in Quebec. The freeze was meant to give the tobacco companies time to negotiate a settlement with class-action members and other creditors, including provincial governments seeking compensation for smoking-related healthcare expenses.
Although the initial stay lasted only a few months, it has since been extended about a dozen times. The ongoing talks remain confidential.
Critics argue that the creditor protection process in this case prioritizes the survival of the tobacco industry over public health concerns. Last week, health organizations, including Action on Smoking & Health, Physicians for a Smoke-Free Canada, and the Quebec Coalition for Tobacco Control, issued a joint statement expressing concern that the provinces seem to be supporting a process that favors the industry.
Cynthia Callard, executive director of Physicians for a Smoke-Free Canada, criticized the process, saying it has allowed the tobacco companies to operate as usual for over five years. She added that recent court filings suggest tobacco manufacturers hold significant influence over the settlement, with references to a "consensual" agreement indicating they may have a strong say in the final outcome.
The companies sought creditor protection in Ontario after Quebec’s highest court ordered them to pay more than $15 billion to roughly 100,000 Quebecers in two class-action lawsuits. These lawsuits were filed by smokers who began smoking between 1950 and 1998 and either developed illnesses or became addicted. Families of deceased smokers were also part of the lawsuits.
Recent court filings indicate that hundreds of class-action members have passed away since the creditor protection process began.
