Wednesday, 7 March 2012

FAQ - Frequently Asked Questions

What is a class action?

A class action is a form of lawsuit where one or more persons (representative plaintiffs) take legal action on behalf of others in the same circumstances. Those who are being represented are considered members of the “class”, even if they have no active participation or even knowledge of the action. Class actions are a relatively new form of legal action in Canada. Quebec was the first province to introduce class actions (in 1978), and Ontario was the second province in 1992.

What are these lawsuits about?

The Montreal trial will involve two distinct class actions. One concerns addiction, the other concerns lung disease.

The Cécilia Létourneau v. JTI-Macdonald Corp, Imperial Tobacco Canada Ltd. and Rothmans, Benson & Hedges Inc (“Letourneau”) case demands a payment of $5,000 to each addicted Quebec smokers as compensation for their addiction. (The court number for this case is 500-06-000070-983).

The Conseil québecois sur le tabac et la santé and Jean-Yves Blais v. JTI-Macdonald Corp, Imperial Tobacco Canada Ltd. and Rothmans, Benson & Hedges Inc (the “Blais” case) demands that tobacco companies pay $100,000 in compensation to each Quebec smoker who has suffered lung cancer, larynx cancer, throat cancer or and emphysema. (The court number for this case is 500-06-000076-980). Punitive damages of $5,000 for each individual in both cases is also being sought.

What is the total amount involved?

The total amount sought is estimated at $27 billion dollars. The number of eligible Quebec smokers eligible in the Letourneau case is estimated to be 1.78 million. The total sought in this case is $17.8 billion ($8.9 billion in compensation and $8.9 billion in punitive damages). The number of Quebec smokers eligible in the Blais case is estimated at 90,000. The total sought in this case is $9.45 billion ($9 billion in compensation and $450 million in punitive damages).

Which companies are being sued?

The class actions are against the Canadian operations of the world’s largest tobacco companies: Rothmans Benson and Hedges (wholly owned by Philip Morris International), Imperial Tobacco Ltd. (wholly owned by British American Tobacco) and JTI-Macdonald (wholly owned by Japan Tobacco). The parent companies have not been named in these Quebec actions (although they are included in some other Canadian suits).

How long have these lawsuits been going on?

It has taken more than 13 years for these cases to come to trial. The Letourneau case was filed in September 1998, and the Blais case in November 1998. The cases were ‘certified’ by the court on February 21, 2005 and allowed to proceed. The ruling on the certification established that the cases would be tried together.

Why is the federal government involved in this trial?

In 2008, each of the tobacco companies facing lawsuits in Canada employed a new defensive strategy: in British Columbia they filed ‘third party notices’ and in Quebec filed the equivalent ‘defendant in warranty’. In these motions they alleged that the federal government should be held responsible for any damages awarded against them. In the British Columbia cases, their third party motions were ultimately rejected by Canada’s Supreme Court in July 2011. Although the federal government did not ask to be dismissed from the Quebec cases until after the British Columbia issue had been resolved, it did enter into an agreement with the plaintiffs which would have released it from any damages. This agreement was rejected by the Courts, as was a subsequent request to be dismissed from the case.

What other class actions are ongoing in Canada?

One other Canadian tobacco class action suit has been certified. The “Knight” case is based in British Columbia and seeks both damages and remedial actions from Imperial Tobacco resulting from the sale of so-called ‘light’ cigarettes. Five class actions suits have been filed by the Merchant Law Group in Saskatchewan, Manitoba, Alberta, British Columbia and Nova Scotia. None of these has yet been certified, and in only one are preliminary motions ongoing.  Philip Morris reports that it has been served with an additional class action suit in British Columbia.

Are there similar trials in other countries?

Philip Morris International reports that it is also facing 2 class actions in Brazil.

How are class actions financed?

In Quebec, plaintiffs can seek financial assistance through a class action assistance fund (Fonds d’aide aux recours collectifs, FARC). If successful, they may be required to provide a portion of the amount they recovered to the fund. In 2010, these two class actions collectively received about $300,000 from this fund. More information can be found through FARC.  Lawyers in Quebec are also allowed to work on a contingency basis.