This morning's hearing before Ontario Justice Thomas McEwan took 40 minutes -- somewhat longer than the previous five occasions in which he extended the litigation stay which protects Canadian tobacco companies from their creditors.
The public sessions held in February 2020, September 2020, March 2021, September 2021 and March 2022 were characterized by brevity and the expressed or tacit consent of everyone involved to keep the court sessions as short as possible. With support from all of those whose claims for damages from tobacco companies triggered the use of Canada's Companies' Creditors Arrangement Act (CCAA), the companies have been protected by the courts while continuing their "business as usual" for three and a half years.
Discussed: A proposal to shorten the next extension.
Today's session was to consider the companies' request for a further six month extension - an issue of some urgency given that the current stay expires on Friday. As before, all of the parties participating were in agreement that the negotiations negotiations mediated by the Hon. Justice Winkler should continue. This time, however, the lawyers representing injured Quebec smokers sought to compress the timeframe, and to reduce the extension to mid-January instead of the end of March 2023.
Their reasons were outlined in a motion submitted to the court last week and presented today by Bruce Johnston. This is the first time that Mr. Johnston has appeared before Justice McEwan, but he is no Johnny-come-lately to the issue. Almost a quarter century has elapsed since he and his legal partner Philippe Trudel launched a class action suit on behalf of Quebec smokers addicted to nicotine. He has likely been involved in tobacco litigation longer than any of the other 140 lawyers involved in these CCAA proceedings.
This is not the first time that the Quebec class action plaintiffs (QCAP) have tried to hasten the proceedings. In October 2019, they urged Justice McEwan to put pressure on the negotiations by shortening the litigation stay. Prolonged discussions would have the effect of denying victory to the Quebec smokers whose claims had been upheld by the Quebec Court of Appeal earlier in the year. Justice McEwan was completely unsympathetic to their request at that time: in rejecting their request, the judge criticized the Quebec lawyers' attitude towards the process.
Today, Mr. Johnston prefaced his comments by acknowledging those criticisms and admitting to his own change in perspective since the process began. "When we appeared before you the first time three and a half years ago we were coming out of 21 years of hard fought litigation.... we felt that in some ways this was an attempt to achieve through the CCAA a result that could not be achieved in the court rooms against us."
"We were told that we needed to give peace a chance. I must admit we weren't hearing much John Lennon at the time - we were more on the Rage Against the Machine vibe. It took us a while to adjust and it wasn't the easiest... We recognized that to give peace a chance we had to engage in the process and we had to give enough time to the process for it to work."
He praised Mr. Justice Winkler for his "expert and tireless guidance" in the mediation process, but hinted that not all of the parties shared a sense of urgency: "[Justice Winkler's] capacity is dependent on all parties and claimants accepting the consequences of a global settlement."
He underlined how his clients were losing faith in the process, and how the delays were harming those whose court-awarded damages were continually delayed. "After each renewal, we communicate to approximately 27,000 people and we explain to them that we are engaged in the process and that we believe that the process is in their interest. We are unable to explain to them in any way that is satisfactory why the delay is necessary. What we get in their comments in response is distressing ... They feel that the justice system is not working. They feel that no one cares about them and that nothing is being done for them."
"It is obvious to us that the delays are very serious prejudice for people who are beneficiaries of a judgement and who expect some compensation. What we are asking very simply is that this prejudice be considered when setting the timeline for the future of this file. ... It would help the process if the court indicated to all parties and to the victims that 6 month extensions will not be automatic and that we have to - at this stage of three and a half years - put some pressure on the parties to arrive at a global settlement."
Only one hand was raised in support of this position. On behalf of the Canadian Cancer Society (which has the right to participate in the hearings, but not the mediation talks), Rob Cunningham quickly stated support for a three-month extension.
Lawyers for the three tobacco companies spoke in indirect opposition to the suggestion. Imperial Tobacco urged the judge to consider the view of the monitors as independent bodies "immersed in the mediation process". The other firms suggested that the 6 month extension was following a time-table set by Justice Winkler - "everyone has moved in accordance with the pace that the mediator has set."
The monitors gave an opinion with wiggle-room: "the mediation timeline and the extension are two different issues - one is not tied to the other."
The firm representing 6 provinces (British Columbia, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island) and the territories was equivocal. They "did not oppose" the 6 month extension, but "encourage all parties to negotiate with the goal of a resolution in the near term." Lawyers for the other provinces and for other class actions were silent.
The lawyer representing Justice Winkler said the mediator was "not taking a position" on the question of the length of the extension, but relayed his assurances that "good progress is being made on mediation," with "parties on the right track".
Justice McEwan has been quick to decide in previous decisions, but on this occasion said he needed time before making a decision. "I will think overnight and will provide my decision tomorrow."
He did, however, provide some comfort to members of the Quebec class action who might have been watching the proceedings. "QCAP has raised legitimate concerns with respect to the time this is taking ... this matter needs to have a sense of urgency."
For the first time, he (gently) cracked the whip. "I am not casting any aspersions in any direction, but I want to take this opportunity to reinforce that we need to put our full attention on this matter and continue to drive it forward... we need to redouble our efforts to bring this to a sensible conclusion."
Left undiscussed: Heart and Stroke Foundation's request for a seat at the table
As reported earlier, the Heart and Stroke Foundation has submitted a request for inclusion in the settlement discussions for those seeking the dedication of a portion of any settlement proceeds to an independently administered health promotion fund.
Among those who thought this motion might be discussed today was Justice McEwan, who was set to hear arguments before being informed by the monitors that this was no longer on the schedule for today.
Other motions in this process have been sidelined. Over a year ago, lawyers for Ontario farmers asked for a distinct treatment as creditor, but have yet to have their day on this motion in this court.
Meanwhile, the proposal by Heart and Stroke has raised concerns in other quarters. The Quebec Coalition for Tobacco Control today issued a statement calling for governments to give priority to a settlement which includes measures to directly reduce tobacco. "A deal that would force big tobacco companies to meet tobacco reduction targets, rather than that a financial settlement for provinces and an anti-tobacco fund, would be an ethical approach that would save lives."
