(Reuters) -A Canadian court approved a plan to settle long-running tobacco lawsuits in the country as part of which the units of three Big Tobacco companies will pay C$32.5 billion ($22.67 billion), Philip Morris and British American Tobacco said on Friday.
The settlement resolves lawsuits — that have hung over Philip Morris, British American Tobacco and Japan Tobacco — that claimed the Canadian units of the three tobacco giants knew since the 1950s their products were causing cancer and other illnesses and failed to warn consumers adequately.
A Quebec court in 2019, following an appeal, upheld its 2015 decision to award damages of around C$15 billion to some 100,000 smokers and ex-smokers in the province, who had filed class action lawsuits against the companies.
The decision forced the Canadian units of the three cigarette makers — Imperial Tobacco Canada, JTI-Macdonald and Rothmans, Benson & Hedges (RBH) — to seek bankruptcy protection in 2019.
Philip Morris’ Canadian unit, RBH, was allowed to retain C$750 million from the upfront payment related to the settlement, the company said on Friday.
“The plan also contains a number of operating covenants that would govern RBH’s combustible business going forward until the settlement amount has been paid,” the company added.
Philip Morris said objections to the settlement plan by its affiliate and others had been resolved.
The plan, which was proposed by a court-appointed mediator, would be implemented and become effective in 2025.
British American Tobacco said on Friday the settlement will not affect its forecast for 2025.
($1 = 1.4335 Canadian dollars)
(Reporting by Juveria Tabassum in Bengaluru; Editing by Shounak Dasgupta)
Comments