NEWS

The history of anti-tobacco litigation in Canada

03/13/2012 05:58 EDT | Updated 05/13/2012 05:12 EDT

The Quebec class action suit against Canada’s three largest tobacco companies, which began March 12 in Montreal, is one of several legal battles with the tobacco industry in this country.

Litigation against tobacco firms in Canada has been instigated by individuals, groups and governments.

Much of this legal action is modeled on the Tobacco Master Settlement Agreement of 1998, a class action in which 46 U.S. states took the four largest U.S. tobacco companies to court. In 1998, they won a combined payout of $206 billion US over 25 years.

Here’s a look at the biggest court cases against the tobacco industry in Canada.

Smuggling

The late-'80s and early-'90s saw governments levy higher and higher tobacco taxes, which gave rise to a sustained contraband campaign.

In order to avoid Canadian excise levies, several cigarette manufacturers shipped cartons of their product to the U.S., ostensibly to be exported abroad.

But millions of these cartons were then smuggled back into Canada, many through native reserves that straddled the U.S.-Canadian border.

Canadian governments said that the tobacco companies were aware of what was going on and were turning a blind eye.

So several provinces tried to file lawsuits in U.S. federal courts against the parent companies of these firms, seeking to regain tax revenue that had been lost because of cigarette smuggling.

The judges refused to hear the cases, ruling that a foreign government (ie. Ontario) could not sue in a U.S. court.

However, the provinces and the federal government were more successful prosecuting the cases in Canada.

In a 2008 agreement, Imperial Tobacco paid a $200-million criminal fine and an additional $400 million in penalties over 15 years, while Rothmans, Benson & Hedges paid a $100-million fine and an additional $450 million in penalties over 10 years.

In 2010, JTI-Macdonald and its affiliate Northern Brands International agreed to a combined criminal fine of $225 million, while R.J. Reynolds was charged with $325 million in civil penalties.

Health care cost recovery

In 1998, British Columbia became the first province to begin legal proceedings against tobacco companies with the aim of recouping health-care costs related to the treatment of the effects of smoking.

Among the B.C. government’s claims were that tobacco companies advertised to children, marketed "light" cigarettes that they knew were no safer than regular cigarettes, and conspired to suppress research on the health risks of smoking.

Every province and territory now has a variation of B.C.’s Tobacco Damages and Health Care Costs Recovery Act, legislation that enables them to sue tobacco companies to recover health-care costs.

Since then, New Brunswick, Nova Scotia, Saskatchewan, Manitoba and P.E.I. have joined B.C.’s ongoing action against the tobacco companies, and are seeking to recover billions of dollars.

Class actions

A number of individual civil cases have been filed against tobacco companies in Canada, but few have been certified, and none have gone as far as the one that began March 12 in Montreal.

The plaintiffs in the Quebec case claim that the tobacco firms knew for decades that their products were harmful, and are seeking damages of $27 billion, making it the largest class-action case in Canadian history.

The suit has taken more than 13 years to get before a judge, and is likely to carry on for quite a while.

The defendants — Imperial Tobacco Canada, Rothmans, Benson & Hedges and JTI-Macdonald — aren't expected to make their case until 2013.

MORE:cbcNews