The Quebec Council on Tobacco and Health announces that a settlement has been reached with tobacco companies in the country to compensate patients to the tune of nearly $4.3 billion. The tobacco industry’s plan of arrangement must still be submitted for approval to all creditors on December 12 in Toronto.
JTI-Macdonald, Rothmans, Benson & Hedges et Imperial Tobacco have been in financial difficulties since the Quebec Court of Appeal forced them, in 2019, to pay more than $13 billion to 100,000 victims of smoking in this province.
- said last month that the three companies were on the verge of submitting an agreement in principle to their creditors before mid-December, but that they still intended to request a new reprieve of debt at the end of the month. six months to continue to enjoy the protection of the courts in the event that their rescue plan is rejected.
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The Quebec Court of Appeal concluded, like the Superior Court of Quebec in 2015, that the tobacco giants had failed in their duty to inform their customers of the dangers of cigarettes.
Photo : - / Jonathan Villeneuve
In an unexpected turn of events, the Quebec Council on Tobacco and Health wrote in a press release on Thursday that the plan will allow, if approved, the distribution of significant financial compensation to the victims as well as their heirs and the heirs of the heirs
.
It is mentioned that Quebec victims of smoking (and their possible heirs) will be entitled to compensation of up to $100,000 each based on the principal amount awarded to them by previous judgments rendered in Quebec.
All-out pursuits
The three companies placed themselves under the protection of the federal Creditors Arrangement Act after losing an appeal in Quebec against a class action by thousands of patients suffering from a tobacco disease.
After their defeat, the three companies turned to an Ontario court to obtain court protection.
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ASH Canada, Physicians for a Smoke-Free Canada and the Quebec Coalition for Tobacco Control still hope that the final bailout plan will include very strict public policies against tobacco use in the country.
Photo : - / Benoit Jobin
The Ontario Superior Court therefore suspended the judgment of the Quebec Court of Appeal and, at the same time, all legal proceedings initiated against tobacco companies in the country, including that of the Ontario government.
The provinces and territories are trying to recover the sums of money they have invested for years in the care of tobacco patients.
And in every province and territory, tobacco patients had also initiated a class action against the three tobacco giants, but their efforts before the courts were only just beginning.
Other industry concessions
On this subject, the Quebec Council on Tobacco and Health adds that the three companies will pay $2.521 billion to compensate, in the nine other provinces and three territories, victims who have been diagnosed with lung or breast cancer. throat or chronic obstructive pulmonary disease between March 8, 2015 and March 8, 2019 with compensation of up to $60,000 each.
The provinces and territories are not left out, since the bankruptcy exit plan provides them with $24 billion over an indefinite period to end their legal proceedings in the country in order to recover health care costs linked to tobacco.
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Each request for a stay for more than five years has shown that the three companies have continued to sell their products while trying to avoid bankruptcy.
Photo : Reuters / Michaela Rehle
Of these 24 billion dollars, 6 billion will be released upon implementation of the restructuring plan. If the agreement is accepted on December 12, it will go before the Ontario Superior Court early in the year.
The settlement plan finally contains the creation of a charitable foundation which will finance programs to combat tobacco diseases thanks to an amount of one billion dollars from the industry.
This fund was of capital importance for the Canadian Cancer Society, which in 2019 had obtained observer status in this commercial dispute without however participating in the talks.
Negotiations between the tobacco giants and their creditors took place behind closed doors for five and a half years and the three companies obtained 12 reprieves from the courts to avoid bankruptcy.
