On May 14, Justice Thomas McEwen had entertained arguments about why or why not the Quebec class action lawyers should be allowed to spend money provided to them by bankrupted insurance companies who had once issued policies to Imperial Tobacco and Rothmans, Benson and Hedges.
He told them to go work it out themselves, with the help of the former Chief Justice who is mediating between the companies and their litigation-related creditors during the CCAA process. Justice McEwen gave the two tobacco companies and the Quebec class action team a 2 week deadline to cone to an agreement. If they couldn’t do so by last Friday (May 31) he threatened to take a winner-take-all approach to his decision.
Sure enough, late last week a proposal was submitted to him, and posted on the monitors’ websites. It is short and to the point: the class action team can ask Justice Riordan for the funds to be spent in the way they had been suggesting from the start, but this should not be considered a precedent. Some of provinces and the tobacco companies have signalled that they similarly oppose the Quebec claim being able to access the $1 billion put in trust for their claim by order of the Quebec Court if Appeal.
Once this draft order is signed by Justice McEwen, and the dispersal of funds is approved by Justice Riordan, the Quebec government’s arms-length Fonds d’aide will be repaid for at least some of the loans it has provided to the case over the past many years. There will also be some money to cover the costs of handling questions from potential class members.
Meanwhile the clock is ticking. Justice McEwen’s order suspending all tobacco litigation expires at the end of the month. Our next big peek at developments will likely be on June 26th, when the next phase of this process will be discussed in his court.
