.... and an argument about protecting "future victims"
The insolvency protection for Canada's three large tobacco companies now seems set to enter its fifth year. Notice has been given that a hearing to extend the litigation stay will take place on March 28th at 11:00 a.m.. Another hearing is set for April 14th to consider the request of the Heart and Stroke Foundation for one more seat to be placed at the negotiating table - this one to represent the interests of "future tobacco harm" victims.
Getting ready for year 5
It was in early March 2019 that JTI-Macdonald bounced from defeat at the Quebec Court of Appeal to land before a sympathetic Ontario Court to seek protection under the federal Companies Creditors Arrangement Act (CCAA). Within the month, the other two companies that shared the burden of a court-ordered $15 billion payment to injured Quebec smokers had climbed on the CCAA wagon.
Since then, the Court has consistently extended the litigation stay and directed the companies to negotiate with injured smokers from Quebec and other provinces, together with all 10 provincial governments to reach a "global settlement" with these Canadian branches of the three largest multinational tobacco companies.
The current stay expires on March 31, 2023. The decision to set the hearing date only 2 days earlier than the scheduled expiry suggests that the companies know they will receive another renewal with no difficulty.
A request for representation for the smokers who will foot the bill
Late last summer, the Heart and Stroke Foundation (HSF) came knocking, seeking a seat at the table and askign to represent 'future' smokers whose interests they say are not currently included in these negotiations.
The charity argues that tobacco companies can only make financial payments to governments, injured smokers or other 'creditors' if they are allowed to continue selling cigarettes and allowed to use the revenue from these future sales to underwrite any damages they pay. They identify these continuing smokers as Future Tobacco Harm Stakeholders ('FTH Stakeholders').
The solution they propose is for some portion of the money paid by smokers be allocated to a Fund to "meaningfully address the future harm that will be suffered by the FTH Stakeholders, including through, among other things, the funding of tobacco-use prevention and cessation programs and other similar programs that are directly linked to addressing and remediating the harms that will be suffered by the FTH Stakeholders."
As part of this request, HSF disagrees with proposals that the tobacco lawsuits be used to accelerate or direct the winding down of the tobacco industry in Canada - arguing instead that the CCAA process is designed to keep the companies in business and that future tobacco sales will benefit society by allowing the industry's debt to be paid. ("to find a path so that tobacco companies will continue oeprations in future and that this represents some social good in that their continuation will see more of the claims paid.")
HSF's request to present their motion was not presented at the last hearing CCAA hearing in September, but following a case conference in February has been scheduled for April 14. Only if HSF gets past this hurdle will it be able to present its core request at a later hearing.
Will the charity be able to shoe-horn its way into the proceedings? Not if the tobacco companies and their monitors are successful with their procedural objections to the main motion being given court time.
More information
Documents related to these upcoming hearings will be posted on the monitor's web-sites.
(updated March 16, 2023)
