All posts tagged: tobacco class action

Ruling clarifies circumstances under which securities can be ordered

Tobacco companies suffered a second legal setback in less than a month after the Quebec Court of Appeal ordered two cigarette makers to set aside nearly $1 billion in security, the largest ever in the province’s history, to ensure that money is available to pay victims who won a landmark $15.5 billion class action lawsuit earlier this year.

In a ruling that clarifies the exceptional circumstances under which securities can be ordered, the appeal court ordered Imperial Tobacco Canada Ltd. to pay $758 million in seven quarterly instalments and Rothmans, Benson & Hedges Inc. $226 million in six quarterly instalments, beginning in December until next year. If the tobacco manufacturers are successful in having the $15.5 billion judgement overturned on appeal, the security will be returned to them. If not, it will be available for distribution to victims who launched the class action suit. (A motion for security was not sought against JTI-MacDonald Corp. because one of the lawyers became ill).

“It’s a very significant ruling because it ensures that should the victims win on appeal there will be funds immediately available for the victims,” noted Rob Cunningham, a lawyer and senior policy analyst for the Canadian Cancer Society.

Tobacco companies do not have to pay initial $1.13 billion in tobacco class action suit

Three Canadian tobacco companies will not have to make an immediate $1.13 billion payment to Quebec smokers who won a landmark class action suit after the Quebec Court of Appeal held that the justification for the provisional execution is weak, the prejudice to the firms serious, and that the balance of convenience weighs in their favour.

An initial payment of $1.13 billion was due this weekend after Quebec Superior Justice Brian Riordan held in Létourneau c. JTI-MacDonald Corp., 2015 QCCS 2382 that it was “high time that the companies started to pay for their sins” and “high time” for the plaintiffs and their lawyers to receive some relief from the “gargantuan” financial burden of bringing the tobacco companies to justice.

But the three-judge appeal court panel found that the existence of those “sins” is sub judice, or under judicial consideration, by the Court of Appeal, and therefore this “weakness in the order behooves our intervention.”