British Columbia Renews Tobacco Industry Action

The Government of British Columbia has re-launched its action to recover health care costs from companies in the tobacco industry. The Statement of Claim, filed on January 24, 2001, alleges that the tobacco industry has known for five decades that cigarettes cause disease, but systematically concealed its knowledge from consumers. Named as defendants are Imperial Tobacco Canada Limited; Rothmans, Benson & Hedges Inc.; and JTI-Macdonald Corp. Also named are The Canadian Tobacco Manufacturers’ Council, the tobacco industry’s trade association in Canada.

Several foreign and multinational tobacco companies are also named as defendants. These companies, which are alleged to have conspired with the Canadian defendants, include: British American Tobacco (Investments) Limited; B.A.T Industries plc; Philip Morris Incorporated; Philip Morris International, Inc.; R.J. Reynolds Tobacco Company; R.J. Reynolds Tobacco International, Inc.; and various members of the Rothmans International group of companies based in Europe.

Under the B.C. Tobacco Damages and Health Care Costs Recovery Act (TDHCCRA), which was brought into force on January 24, 2001, the government can recover those health care costs attributable to a “tobacco related wrong”, which is defined as a breach of duty by a tobacco manufacturer to a consumer. The government of BC has estimated that it spends $500 million per year treating sick smokers, which could make the recently-filed action the highest-stakes lawsuit in Canadian history.

The present lawsuit is similar to one launched by BC in 1999, which was dismissed in early 2000 when a previous version of the TDHCCRA was struck down as being beyond the territorial competence of the Province by Mr. Justice Holmes of the BC Supreme Court. In the Spring of 2000, the statute was amended to accommodate Holmes J.’s reasons and was re-enacted.

British Columbia has become the first jurisdiction in the Commonwealth to file a health care costs recovery action against the tobacco industry. Several other provinces have expressed an interest in following BC’s lead.

The Province is represented by a team led by Dan Webster, Q.C. and Elliott Myers of Bull, Housser & Tupper, along with co-counsel Thomas Berger, O.C., Q.C. Acting for Imperial Tobacco Canada Limited are Bill Berardino, Q.C. and David Harris of Berardino & Harris. Jack Giles, Q.C. and Jeffrey Kay of Farris, Vaughan, Wills & Murphy are representing JTI-Macdonald Corp. Representing Rothmans, Benson & Hedges Inc. are Jim Macaulay, Q.C. and Kenneth Affleck, Q.C. of Macaulay McColl.