• 25 June 2015

Tobacco Firms’ Billion Pound Payout

by Watson Woodhouse

A Canadian court has ruled that three tobacco companies failed to sufficiently warn their customers of the risks associated with their products.

Quebec Superior Court ordered the firms to pay $15.5bn damages between them. The payout – around £8bn – is the largest amount to be awarded in Canadian history.

The class-action lawsuit was taken out by smokers who believe the firms did not make them aware of how dangerous their cigarettes were. A million smokers from Quebec were represented in the landmark action.

There were two groups of claimants, those suffering from smoking-related diseases and those who became addicted to nicotine.

Similar tobacco litigation claims have also succeeded in the US, although the awards have been substantially lower. There have never been any successful tobacco litigation cases in the UK, where past claims have failed when courts ruled in favour of tobacco companies. The courts concluded that the British public have been sufficiently aware of the dangers of smoking since the 1970s.

The news comes after tobacco companies announced in May their intention to bring a claim against the UK government over plans to introduce compulsory plain packaging of cigarettes.

Legal experts say banning branding on packaging would breach intellectual property law and the free movement of goods within the EU.

Tobacco firms say their intellectual property will be unfairly confiscated, leading to lost profits. If successful, a payout as high as £11bn have been predicted.

MPs approved the public health measure in March this year but it is not expected to be introduced until 2017. The removal of the branding is intended to discourage young people from taking up smoking.

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