Thursday, 23 July 2015

"No" to provisional execution says the Court of Appeal.

After a nail biting couple of weeks, the Court of Appeal came down late this afternoon with its decision on the question of whether the tobacco companies who have been found responsible for causing lung cancer and heart disease would have to provide some money to their victims before the higher courts could listen to their challenge of the judgment against them.

The Appeal Court agreed to the companies' request to strike down the part of Justice Riordan's ruling that requirement them to make an early "provisional execution" of $1.1309 billion.

The companies, which had previously been working to a June 26 deadline to deposit sums roughly equal to their yearly earnings, can instead continue to ship their profits to their overseas owners. We will never know whether their threats to put the Canadian operations of the multinational companies into insolvency instead of agreeing to a court ordered payment were genuine.

The ruling, issued by Justices Marie-France Bich, Paul Vézina and Mark Schrager, was issued in the early evening - after the stock markets had closed.

In it, the three judges made clear that they had come to no conclusions about the central issues in the condemnation of the companies' behaviour made by Justice Riordan almost two months ago. ("We make no comment whatsoever on the strengths or weaknesses of any of the other parts of the judgment." ) During the hearing on July 9th, they had been presented with an hour-long litany of supposed errors made by Justice Riordan. These allegations of judicial error apparently paid no role in their decision.

The judges also made clear that they are not indifferent to the circumstances of those who are suffering.

[33] We are certainly not without empathy for potential class members who may die of a tobacco related illness prior to receiving any compensation. The judge may have a point that this state of affairs represents serious prejudice measured against the time to bring the case to an end. Unfortunately, the law relating to class actions makes it such that the order of provisional execution is of questionable benefit to potential class member.

The reasons they gave for agreeing to the companies' request included:
  • The prospect of a further delay for appeals is not a legal justification for provisional execution. 
  • They do not think that the appeals should take 6 years to be completed, and noted that the tobacco companies were willing to expedite the process.
  • A further delay in receiving payments will not "aggravate" the injuries received by victims
  • They do not like applying provisional execution to the class action process, and they find little precedent to rely on, ("On a strict legal basis one may wonder whether provisional execution is simply incompatible with class actions...")
  • There is no evidence that an early payment is necessary to help the lawyers representing smokers to see the case through to the final appeals.
  •  If the companies win on appeal, it will be hard to recover payments from those who have received them.
The companies did not get everything they asked for in this round. The judges refused to put a sealing order on the financial statements that they had used to support their claims that they had insufficient funds to satisfy the provisional execution. These financial reports are now public documents -- or will be once someone goes to the court to copy them.

The early payment demanded by Justice Riordan was like icing on the cake of his ruling. For the moment, all that's left is cake!