A record judgement affecting almost 1 million Canadians could have unintended consequences for advisors selling private health insurance.
By Will Ashworth
A record judgement affecting almost 1 million Canadians could have unintended consequences for advisors selling private health insurance.
“By choosing not to inform either the public health authorities or the public directly of what they knew, the companies chose profits over the health of their customers,” Quebec Superior Court Justice Brian Riordan wrote in his 276-page judgment. “Over the nearly 50 years of the class period, and in the 17 years since, the companies earned billions of dollars at the expense of the lungs, throats and the general well-being of their customers.”
Riordan’s ruling calls for British American Tobacco’s Imperial Tobacco subsidiary to pay $10.5 billion, Rothmans, Benson & Hedges Inc. is on the hook for $3.1 billion and JTI-MacDonald Corp. another $2 billion. A long time in the making the class-action lawsuits sought $27 billion in damages and are considered the largest civil cases in Canadian history.
“It's a big day for victims of tobacco, who have been waiting for about 17 years for this decision,” said Mario Bujold, executive director of the Quebec Council on Tobacco and Health. “It was a long process — but arrived at the destination and it's a big victory.”
For each of the provinces, who combined are seeking $120 billion collectively from the tobacco companies for smoking-related health care costs, this ruling is extremely noteworthy. Should they be successful in the recovery of some of these costs combined with a class-action victory, it could mean a decline in the demand for private health care insurance.
All three companies are expected to appeal the Quebec Superior Court’s decision which requires that they make an initial deposit of $1.1 billion in moral damages plus all punitive damages.
"Today's judgment ignores the reality that both adult consumers and governments have known about the risks associated with smoking for decades,” said Tamara Gitto, vice-president of Imperial Tobacco Canada, “and seeks to relieve adult consumers of any responsibility for their actions.”
While the $15.6 billion awarded is an impressive number it’s unlikely that the tobacco companies will pay anywhere near this amount by the time the case makes its way through the legal system.
“Class actions always have big numbers attached, and having it quantified is a bit of a shock,” said Erik Bloomquist, an analyst at Berenberg in London. “It’s unlikely the full amount will ever be paid.”
A record judgement affecting almost 1 million Canadians could have unintended consequences for advisors selling private health insurance.
“By choosing not to inform either the public health authorities or the public directly of what they knew, the companies chose profits over the health of their customers,” Quebec Superior Court Justice Brian Riordan wrote in his 276-page judgment. “Over the nearly 50 years of the class period, and in the 17 years since, the companies earned billions of dollars at the expense of the lungs, throats and the general well-being of their customers.”
Riordan’s ruling calls for British American Tobacco’s Imperial Tobacco subsidiary to pay $10.5 billion, Rothmans, Benson & Hedges Inc. is on the hook for $3.1 billion and JTI-MacDonald Corp. another $2 billion. A long time in the making the class-action lawsuits sought $27 billion in damages and are considered the largest civil cases in Canadian history.
“It's a big day for victims of tobacco, who have been waiting for about 17 years for this decision,” said Mario Bujold, executive director of the Quebec Council on Tobacco and Health. “It was a long process — but arrived at the destination and it's a big victory.”
For each of the provinces, who combined are seeking $120 billion collectively from the tobacco companies for smoking-related health care costs, this ruling is extremely noteworthy. Should they be successful in the recovery of some of these costs combined with a class-action victory, it could mean a decline in the demand for private health care insurance.
All three companies are expected to appeal the Quebec Superior Court’s decision which requires that they make an initial deposit of $1.1 billion in moral damages plus all punitive damages.
"Today's judgment ignores the reality that both adult consumers and governments have known about the risks associated with smoking for decades,” said Tamara Gitto, vice-president of Imperial Tobacco Canada, “and seeks to relieve adult consumers of any responsibility for their actions.”
While the $15.6 billion awarded is an impressive number it’s unlikely that the tobacco companies will pay anywhere near this amount by the time the case makes its way through the legal system.
“Class actions always have big numbers attached, and having it quantified is a bit of a shock,” said Erik Bloomquist, an analyst at Berenberg in London. “It’s unlikely the full amount will ever be paid.”
