An Ontario judge has ruled that a controversial $50-billion lawsuit can proceed against 14 tobacco companies that are accused of raising health care costs in Ontario by selling a risky and addictive product.
In a ruling earlier this week, Madam Justice Barbara Conway of the Ontario Superior Court rejected an application from seven foreign-based companies that wanted a lawsuit launched by the provincial government thrown out on the basis that the court had no jurisdiction over them.
Ontario Attorney-General John Gerretsen said the ruling paves the way for the lawsuit to proceed.
“The province has achieved a milestone in its efforts to recover past and ongoing health care costs borne by Ontario taxpayers due to tobacco-related illness,” Mr. Gerretsen said in a statement Friday.
The lawsuit was launched in 2009 and claimed that the tobacco companies knew about the addictiveness of cigarettes and the health damage they caused but deceived the public by misrepresenting the risks and failing to warn consumers about the dangers of smoking.
The lawsuit also claims the companies promoted cigarettes to children and teenagers and did not take all available steps to reduce the risks caused by their products.
The claims have not been proven in court.
The government said it is seeking $50-billion in damages because smoking is the number one cause of premature death and illness in Ontario and costs the health care system $1.6-billion annually.
“We will continue to vigorously pursue this litigation on behalf of all Ontarians,” Mr. Gerretsen said.
The tobacco companies named in the lawsuit include Rothmans Benson & Hedges Inc., JTI-Macdonald Corp. and Imperial Tobacco Canada Ltd. as well as their parent companies.
The firms have denied the claims. The industry has warned that the lawsuit would drive the companies into bankruptcy because there is no hidden pot of money available to pay the enormous claims if they succeed, and has called the lawsuit “hypocritical” because the Ontario government has collected billions of dollars in taxes on tobacco products over the years.
The Ontario court ruling is consistent with rulings in other provinces that have launched similar lawsuits to recoup health care costs.
British Columbia, New Brunswick and Newfoundland have also sued the tobacco companies, and courts in B.C. and New Brunswick have also upheld the right to include the Canadian firms’ foreign parent companies in the suits.
A lawyer for the Canadian Cancer Society said the Ontario lawsuit is “enormous” in importance and it is critical to have the foreign parent companies named in the case. “It’s important. The allegations are that they participated and directed the conspiracy to deny the health effects and have a cover-up and destroy research,” Rob Cunningham said.
“And also they have very deep pockets, and they are able to pay a very substantial judgment. ... The foreign parent companies have enormous capacity to pay, more than just the Canadian companies.”
Tobacco companies have faced lawsuits from U.S. states for decades, reaching settlements totalling almost $250-billion with those jurisdictions over the past 25 years, Mr. Cunningham said.