New Brunswick vs. Rothmans Inc.

December 7, 2005
Tobacco Damages and Health Care Costs Recovery Act is introduced and given first reading in the New Brunswick Legislative Assembly.

December 9, 2005
Tobacco Damages and Health Care Costs Recovery Act is given approval at second reading by New Brunswick Legislature.

June 20, 2006
Tobacco Damages and Health Care Costs Recovery Act passes Committee of the Whole in the  New Brunswick Legislature.

June 21, 2006
Tobacco Damages and Health Care Costs Recovery Act  passes third reading in the  New Brunswick Legislature.

June 22, 2006
Tobacco Damages and Health Care Costs Recovery Act  is given Royal Assent by the New Brunswick Lieutenant Governor.

December 21, 2006:
New Brunswick announces its intention to sue and issues a request for proposals (RFP) for a lawfirm to represent the Province and provide advice in its legal action against tobacco companies. 

September 12, 2007:
Selection of consortium of lawfirms announced.

March 13, 2008
New Brunswick files a statement of claim against tobacco companies operating in Canada.

March 20, 2009

May 14, 2009

July 14, 2009

October 21, 2010

February 23, 2012

  • New Brunswick Court of Queen's Bench strikes down the third p arty claims against the federal government in the province's tobacco damages recovery suit.  Ruling

 


Selected Media Coverage


Bill would allow province to sue tobacco companies (05/12/07)

NB 1670. Dec. 7, 2005

FREDERICTON (CNB) - Legislation that would give New Brunswick the ability to recover health-care costs from tobacco companies for tobacco-related illness was introduced today by Attorney General Brad Green.

"Tobacco companies must be held accountable for the enormous costs of treating tobacco-related illness," Green said. "Not only have New Brunswick families had to deal with personal tragedies, but also taxpayers have borne the financial burden."

The Tobacco Damages and Health-care Costs Recovery Act would give the province legal authority to sue the tobacco industry for past and future health-care costs related to the use of tobacco products. New Brunswick could proceed alone or in co-operation with other provinces.

The bill is similar to legislation in British Columbia that was recently declared constitutional by the Supreme Court of Canada. New Brunswick was an intervenor in support of British Columbia. Newfoundland and Labrador, Nova Scotia and Ontario have since introduced or passed equivalent legislation.

"Tobacco use is one of the most preventable causes of death and illness in our province," said Health and Wellness Minister Elvy Robichaud. "This bill supports our strategy to reduce illness related to smoking, prevent young people from starting to smoke and encourage smokers to quit."

The legislation is consistent with the government's Smoke-Free Places Act, the Tobacco Free Schools program and its participation in the New Brunswick Anti-Tobacco Coalition.

 

Province moves toward plans to sue tobacco companies (06/12/21)

Dec. 21, 2006

FREDERICTON (CNB) - The Government of New Brunswick has taken the next step toward holding tobacco companies financially responsible for the health-care costs of tobacco-related illnesses.

Attorney General T.J. Burke has begun the process to hire a qualified law firm or consortium of law firms to represent the province and provide advice in its legal action against tobacco companies. A request for proposals with a deadline of Jan. 31, 2007, has been issued.

"Tobacco companies must be held accountable not only to New Brunswick families who have had to deal with the emotional impact of smoking-related illnesses, but also to the taxpayers who pay the enormous health-care costs," Burke said. "This government is committed to making that happen."

Legislation enacted earlier this year gave the province the ability to recover health-care costs from tobacco companies. The Tobacco Damages and Health Care Cost Recovery Act gives the province legal authority to sue the tobacco industry for past and future health-care costs related to the use of tobacco products.

The bill is similar to legislation in British Columbia that was declared constitutional by the Supreme Court of Canada. New Brunswick was an intervener in support of British Columbia. Once the legislation is proclaimed, the province will have two years from that date to begin action against tobacco companies.

Health Minister Mike Murphy said that the government will work hard to keep New Brunswickers from smoking, while also ensuring that tobacco companies are made liable for the pain and suffering caused by their products.

"Cigarettes and other tobacco products are responsible for many preventable deaths from cancers, heart disease and lung disease," Murphy said. "This is why our government is determined to work with stakeholders to keep New Brunswickers from smoking or using other tobacco products, and to help those who already smoke to quit. And it's why we believe that tobacco companies must be held accountable for the harm done to the health of individuals, and for the burden borne by taxpayers to provide health care to those who become sick from using tobacco products.''

This move is part of a comprehensive approach to eliminating tobacco use in the province.

Lawyers retained for tobacco lawsuit (07/09/12)

FREDERICTON (CNB) - The Province of New Brunswick has retained a consortium of lawyers to sue tobacco companies for health-care costs of tobacco-related illnesses.

"I am pleased to say that we are moving ahead on our commitment in the Charter for Change to hold tobacco companies accountable to both New Brunswick families and to taxpayers for the health care costs involved in dealing with the enormous physical, emotional and financial impact of smoking-related illnesses," Justice and Consumer Affairs Minister T. J. Burke said.

The consortium includes two New Brunswick lawyers: Philippe J. Eddie, Q.C. of Moncton and Chris Correia with Correia and Collins in Saint John. In addition, it includes Siskinds LLP, Fasken Martineau DuMoulin, and Bennett Jones from Ontario. Two law firms from the United States that has been involved in settlements of a number of state lawsuits are also part of the consortium - Richardson, Patrick, Westbrook and Brickman of South Carolina and Martin and Jones of North Carolina.

The Province announced last December its intention to sue and issued a request for proposals (RFP) with a Jan. 31, 2007, deadline for a qualified law firm or consortium of law firms to represent the Province and provide advice in its legal action against tobacco companies. There were four qualified submissions to the RFP.

"I wish to assure New Brunswickers that our government will continue to do everything it can to prevent the needless pain and suffering caused by tobacco use," Health Minister Michael Murphy said. "Tobacco companies certainly know the pain and suffering caused by the use or exposure to their products, and we believe it is time they are held accountable."

Under the terms of the agreement, the consortium has been retained on a contingency fee basis, which means the Province will not pay any legal costs up front and the consortium will recover its legal fees and disbursements as a percentage of the actual amounts recovered in the litigation.

The fee schedule has been broken down into four stages:

State 1: If a settlement is reached during the initial stage after their retainer, the lawyers will be paid 12 per cent of any settlement reached.

Stage 2: If a settlement is reached after issuance of the statement of claim, the consortium's percentage increases to18 per cent.

Stage 3: If a settlement is awarded after trial, the percentage rises to 20 per cent.

Stage 4: If a settlement is awarded on appeal, consortium will receive 22 per cent.

N.B. moving ahead in lawsuit against big tobacco

Thursday, September 13, 2007 | 9:54 AM ET.  CBC news

Two lawyers from Saint John and Moncton will help New Brunswick take on tobacco companies.

Chris Correia of Saint John and Phillippe Eddie of Moncton join a consortium of lawyers who will try to make the legal case that big tobacco should pay the province for the medical cost of treating smokers.

Attorney General and Justice Minister T.J. Burke said experts in the departments of health and justice have been doing research to determine what those costs have been.

"Through this information-gathering process, we'll be able to better quantify exactly how much it has cost the province of New Brunswick with respect to attributable tobacco-related wrongs on the part of tobacco-related manufacturers," he said.

Burke said his office offered the legal jobs to anybody who was interested in taking on a very costly, lengthy and technical lawsuit.

Those who applied were then graded.

"An evaluation team was put together by representatives from the Department of Justice and the Department of Health who evaluated their ability, their resources and also, the proposal that they put forward, which largely had a big part in determining who was going to be the lead for New Brunswick."

Burke said experience was important, but the other key factor was how the lawyers would bill the province.

The consortium of lawyers are working on a contingency fee.  They will receive a percentage of whatever the province recovers through legal action, to a maximum of 25 per cent.

The province proclaimed its first anti-tobacco lawsuit legislation earlier this year, and will be the second province to haul tobacco companies to court. British Columbia was the first province to pass a law enabling itself to sue cigarette makers.

Burke says it could take years for New Brunswick's lawsuit to make it to the courts, if it doesn't settle.

New Brunswick Government Announcement "No Surprise"

MONTREAL, Sept. 13 /CNW Telbec/ - Yesterday's announcement by the New Brunswick government that it has hired a "consortium" of high powered lawyers to sue the tobacco industry comes as no surprise. 

Imperial Tobacco Canada can only repeat here what it has said on many occasions. This lawsuit has nothing to do with health. It has everything to do with money. Not satisfied with taxing the industry, the government also sues in the stated hope of reaching a settlement with the industry.

 The conditions that made a settlement possible in the U.S. do not exist in Canada. There is no room to increase the price of the product. The government taxes are already so high that illicit trade has reached more than 30 percent in some provinces. 

In any event, the proceeds in the U.S. have been used for anything but health. The stunning fact that the government has found it necessary both to change centuries' old law and to import US lawyers and their appetite for money just to get to the point of filing a lawsuit speaks volumes about its lack of confidence in the merits of its case. 

The case is not about the merits. It is all about looking for a settlement. But the sad teaching of many years of experience in the U.S. is that virtually all settlement money has gone first to exceedingly wealthy lawyers and then to diverse projects that share only the fact that they have nothing to do with smoking and health.

 Governments in Canada, both federal and provincial, are the senior partners in the tobacco industry and the major beneficiaries. They receive $ 9 billion a year in tobacco taxes, 13 times more than the profitability of all the tobacco companies combined. Canada is the most regulated market in the world, with regulations governing the product itself and how it is manufactured, marketed and sold. And governments have been aware for decades of the significant health risks associated with smoking. 

So it is bizarre that governments should now sue an industry that they themselves control and from which they pump the largest share of the revenues. 

There will be no settlement from the industry such as that hoped for by the New Brunswick government. 

This case will take years to resolve. The industry will fight these cases and despite the unfair laws and tactics displayed by the New Brunswick government, is confident of ultimate success. 

Just ask the American plaintiffs' lawyers, they have lost cases too.

For further information: Catherine Doyle, Manager, Corporate Communications, (514) 932-6161, x 2113

N.B. becomes second province to file lawsuit against tobacco industry

Mar 13, 2008, Canadian Press.

FREDERICTON New Brunswick has become the second province to officially file a lawsuit targeting the tobacco industry.

Health Minister Mike Murphy said Thursday the province is committed to holding tobacco companies accountable for the suffering caused by tobacco products.

"The suit is on behalf of people whose health has been harmed by tobacco products, families who have lost loved ones to tobacco-related illness, and taxpayers who have borne the added costs to the health-care system," he said.

While no one in the government was willing to put a dollar figure to the suit, it's expected the province will be seeking to recover tens of millions of dollars.

"Numbers, of course, are going to be substantial because we believe the province of New Brunswick has spent millions of dollars in health care for citizens who have tobacco-related injuries or damages," said T.J. Burke, New Brunswick's attorney general.

"Tobacco has caused tremendous damage to citizens in the province of New Brunswick, and the government has paid substantial costs in medicare with respect to damages related to smoking activity and we're going to recover those costs from these tobacco companies."

News of the lawsuit was welcomed by the president of the New Brunswick Lung Association.

Ken Maybee said thousands of Canadians have died prematurely because of smoking, and people who started smoking at a younger age are now suffering from emphysema and acute bronchitis.

"It is very painful and debilitating to them and very costly to the health-care system," said Maybee.

He said once a settlement is reached, his group and others will have to be vigilant to ensure a portion of the money is used to fund smoking prevention.

British Columbia was the first province to launch a lawsuit against the industry while Manitoba, Saskatchewan, Newfoundland and Nova Scotia have all taken legislative steps to clear the way for their own.

New Brunswick's Liberal government announced in December 2006 that it would take legal action, but provincial legislation allowing it to do so was only proclaimed last week.

The province is using a consortium of lawyers, including two U.S. firms that have been involved in settlements at the state level.

Negotiated settlements by the 50 American states totalled more than US$245 billion over 25 years.

Michael Perley, director of the Ontario Campaign for Action on Tobacco, said he expected lawsuits in Canada could be of the same magnitude.

"There's no reason to believe we shouldn't achieve the same results here in Canada because the behaviour of the American companies that led to that settlement is no different from the Canadian companies over the same periods of time," said Perley.

He called New Brunswick's case "good news," but said it was long overdue.

Perley said all the provinces should have filed suit 10 years ago. He hoped that New Brunswick's action would spur other provinces, including Ontario, to take the tobacco industry to court.

Ontario Premier Dalton McGuinty has said his government doesn't want to punish big tobacco and warned there's "considerable doubt" about the likely success of a lawsuit

 

U.S. lawyer says N.B. has leg up in tobacco lawsuit

 

Published Monday March 24th, 2008 By ROB LINKE, Canadaeast News Service, Appeared on page A4

OTTAWA - Illness due to smoking drove up New Brunswick's health-care costs over the last six decades by $10 billion or more, says a U.S. lawyer playing a leading role to recover those costs by suing the tobacco industry.

"Based on the work of the economists we have retained to look at the data so far, it's upwards of $10 billion for past medical costs," said Charles Patrick, a senior tobacco litigation lawyer in Charleston, S.C., who is part of the team of law firms the province has hired.

Earlier this month, New Brunswick became the second province, after British Columbia, to file a statement of claim initiating a lawsuit against Canadian tobacco companies.

It doesn't specify the damages the province is seeking.

Patrick said it's far too premature to predict a settlement or damages worth $10 billion, but the figure suggests how high the stakes are.

The figure also outstrips an estimate of $1 billion that New Brunswick could recover, offered by a legal and policy analyst with the Canadian Cancer Society and echoed by the Lung Society of New Brunswick.

The legislation New Brunswick enacted to go after the tobacco industry also allows it to seek damages for future health-care costs based on projections of tobacco-related illnesses that emerge later, said Patrick.

His firm - Richardson, Patrick, Westbrook and Brickman - was a leader in the biggest civil law settlement in U.S. history, the 1998 master settlement agreement with U.S. tobacco giants.

The companies agreed to pay $206 billion to all 50 state governments and six U.S. territories over 25 years. The deal led to higher-priced tobacco products and to a ban on billboard advertising.

New Brunswick and other provinces would appear to have advantages galore over the American states as their battle gears up.

First, New Brunswick has enacted legislation, modelled on British Columbia's, that provides a legal foundation laid specifically for the lawsuit.

The New Brunswick law was also drafted in light of a 2005 Supreme Court of Canada ruling on B.C.'s act. The American states, said Patrick, didn't have this legal framework.

"These laws provide for a direct right of action, even in my reading of the legislation, against the U.S. or international parent company," said Patrick. "The Canadian provinces that do file have a leg up."

Second, the U.S. lawsuits pried loose 39-million pages of internal tobacco industry documents during the discovery process.

Now in a repository in Guildford, England, the documents include at least seven-million pages from British American Tobacco Co. Ltd. (BAT), which controls Canada's biggest cigarette maker, Imperial Tobacco Ltd. of Montreal, one of the defendants in New Brunswick's lawsuit.

The damning revelations the Guildford documents contain about Big Tobacco's deceptive marketing practices are the basis for many of the allegations in New Brunswick's statement of claim.

Third, with Canada having universal public health care, a successful outcome in the tobacco litigation could lead to a payoff that is higher per capita than the massive settlements in the United States.

Patrick estimated that in South Carolina, for example, only 20 per cent of the health-care costs due to smoking were borne by the state. Private insurers paid most of the rest.

"We do think that the damages will be much higher because of Canada's single-payer system, proportionately," he said.

New Brunswick's high smoking rates - the second worst in Canada - would also be a factor driving up any settlement or award, said Patrick.

British Columbia and New Brunswick are in the lead among the six Canadian provinces that are going after the tobacco industry.

In 2006-07, the tobacco tax in New Brunswick, paid by wholesalers, generated $85.9 million in revenue for the province. The provincial share of the Harmonized Sales Tax generated a further $20 million.

A 2003 study put tobacco-related health-care costs in New Brunswick at $125 million a year.

In 2005, Health Canada estimated all tobacco-related health care costs at $4 billion a year in Canada.

In 2004, British Columbia pegged its costs at more than $430 million a year.

 



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