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Tobacco companies ordered to pay billions in damages - What does this mean for the industry?

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|Jun 23|magazine8 min read

Do you smoke? A recent case involving smokers in Quebec and three tobacco companies has recently been resolved. And it looks like the smokers have won—money. A judge has decided to award over 15 billion Canadian dollars ($12 billion US) to those suing the tobacco companies.

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In what is believed to be one of the biggest class-action lawsuits in the history of Canada, Superior Court Justice Brian Riordan said his decision to award the smokers was due to the fact that the tobacco companies chose not to inform health authorities or the public directly of what they knew; specifically, it’s been reported (and now ruled upon) that the tobacco companies chose profits over the health of their customers.

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But what does this new ruling mean for other tobacco companies? Will this judgment ultimately hurt the industry?

As of now, damage to the smoking industry doesn’t seem to have taken place. While judgment calls for the companies to issue initial compensation of more than 1 billion Canadian dollars in the two months—60 days—the tobacco companies will appeal the order.

The tobacco companies—JTI-Macdonald, Imperial Tobacco and Rothmans, Benson & Hedges—actually went to trial with the Quebec smokers, the first time tobacco companies had gone to court in Canada to fight against two groups of plaintiffs.

The plaintiffs have reported that they either became very ill or couldn’t quit smoking. The judge is still determining how to specifically divide the funds that have been ordered to the smokers.

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As questioned earlier, what does this new lawsuit ruling mean for the tobacco industry? At the moment, the judge’s ruling shouldn’t affect the industry too much. Smokers will most likely just choose to smoke a different type or brand of cigarette.

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