Did The Fifteen Billion Dollar Tobacco Judgment In Quebec Knock Out The Claim By The Province Of Newfoundland?

Provincial governments and territorial governments around Canada realized rather late that the case against big tobacco to recover the enormous expenses of health care provided to sick smokers was largely made for them by the 1997 tobacco settlements taken earlier in the United States.

The US tobacco settlements on behalf of state attorneys general claiming for health care cost recovery for their states were enormous, and ran into the hundreds of billions of dollars. And yet the authorities who might have taken similar actions in Canada remained unmoved and took no action for at least a decade.

An exception to the rule of indifference was the tobacco suit in Quebec which sought recovery on behalf of the individual smokers who were members of the class. This however, was a suit for the benefit of sick smokers, not a suit for the recovery of the costs of their care, as provided by the medical and hospital care systems of the provinces and territories of Canada.

The first health care cost recovery suit was launched by British Columbia. It took many years before other provinces finally got around to recognizing the merits of the case and that the potential payback for investing the resources necessary to pursue health care cost recovery litigation was enormous.

A number of explanations might be suggested for why Canadian governments took so long to recognize the potential in tobacco litigation: bureaucratic lassitude, political timidity, Canadian litigation culture, an attitude that “we’re different” from the United States.

In any event, prodded by knowledgeable lawyers like me, governments eventually got over their lack of diligence and prepared to sue, and did sue, including Newfoundland and Labrador. I was personally responsible for prompting the government of Premier Brian Tobin to commit to a tobacco lawsuit, although I have had no involvement in it. That is another story.

The province of Newfoundland and Labrador is likely to reap the consequences of its lateness in coming to the party. The $15 billion judgment against big tobacco rendered in Quebec this week likely exceeds the collective assets in Canada of these miscreant companies. The Quebec personal injury action is first in line to be paid, and British Columbia, Newfoundland and the other provinces have not even started to try their cases yet.

The price of failing to recognize opportunity and act on it with quick and effective execution may be that this province has spent untold millions of dollars on a lawsuit that will never go to trial, because the target defendants are heading toward bankruptcy. Private enterprise, in the form of the Quebec sick smoker class action, has run circles around most of the governments of Canada. We always knew that governments are big and dumb, and here is yet more proof.