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Litigation

Holding the Tobacco Industry Accountable

The tobacco industry has contributed to the tobacco epidemic, and it should be held responsible for its portion of the clean up costs just as other industries are. As a direct result of decades of tobacco industry wrongful behaviour, disease and health care costs resulting from tobacco use are far higher than would otherwise be the case.


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Background & current legislation

In 2009, the Alberta government passed the Crown's Right of Recovery Act, which provides the necessary authority for the Alberta government to proceed with litigation against tobacco companies to recover health care costs resulting from the industry's negligence and deceptive marketing practices.

We are pleased to announce that on May 30, 2012 the Alberta government commenced a $10 billion healthcare cost-recovery lawsuit against the tobacco industry.  The government's statement of claim also includes measures that could require tobacco companies to take remedial action to curb tobacco use in Alberta.

In out-of-court settlements in 1997 and 1998 in the U.S., the tobacco industry agreed to pay US$245 billion over 25 years and achieved innovative tobacco control regulations. State governments had initiated health care cost recovery litigations, which proved to be the inspiration for the British Columbia litigation. The U.S. experience demonstrates that if provinces in Canada persevere, there will be substantial rewards at the end of the day.

The tobacco industry's wrongful and deceptive behaviour

For decades, the Canadian tobacco industry has engaged in numerous deceptive, fraudulent and criminal activities, including:

  • the promotion of so-called "light" and "mild" cigarettes
  • adding candy and fruit flavourings to tobacco products, which target youth
  • targeting youth, women and minorities with aggressive marketing campaigns
  • participating in major contraband tobacco schemes
  • misrepresenting the harmful nature of tobacco

Tobacco use is the leading preventable cause of disease and premature death in Alberta, resulting in an estimated 3,000 needless deaths annually. Tobacco is the only legal product that kills half of its users when used exactly as intended by its manufacturers.

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Reasons to hold the tobacco industry accountable

In terms of the magnitude of preventable harm, no other industry comes close to the tobacco industry. Just as other industries are required to pay for their own clean up costs, the tobacco industry should not be exempt from justice and responsibility. The rationale to move forward with health care cost recovery litigation include:

  • The tobacco industry should be held liable for the clean-up costs resulting from its misdeeds.
  • The Alberta government has aggressively pursued clean-up costs from other industries including energy, transportation, manufacturing and insurance. For the past decade, the government has required auto insurers to pay for the health care costs resulting from motor vehicle collisions.
  • The tobacco industry should not get off the hook for the tremendous damage resulting from its deplorable business practices.
  • The tobacco industry needs to be held accountable for its behaviour.
  • No industry should be allowed to get away with deceptive and fraudulent practices. These practices will likely continue until the tobacco industry is held fully accountable for its actions. The promotion of light and mild cigarettes is arguably one of the biggest consumer frauds ever devised. The promotion of candy-flavoured tobacco products is a deplorable strategy designed to get kids hooked. A health care cost recovery lawsuit will force the industry to change its objectionable behaviour based on the experience in the United States.
  • Taxpayers are entitled to health care damages resulting from tobacco use.

Alberta taxpayers have been paying for the tobacco industry's transgressions for many years. The health care system is under tremendous strain and the tobacco industry has contributed to this burden. It would be fiscally responsible for the government to recover the industry's clean up costs on behalf of Alberta taxpayers who have struggled to finance the health care system. Billions of dollars are at stake and it would be negligent to forgo these health care damages. Tobacco use is estimated to have cost the Alberta health care system $470 million in 2002 alone.

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Benefits of health care cost recovery litigation

Litigation against the tobacco industry is about more than just obtaining compensation. A lawsuit is also an essential mechanism to reform industry misbehaviour, gain policy measures in the interest of protecting public health and obtain justice for the decades of harm resulting from the industry negligent and deceptive behaviour. The potential benefits of a health care cost recovery lawsuit include:

  • Health care cost recovery lawsuits can help to reduce tobacco use.
  • Legal action against the industry may lead to the creation of new tobacco control measures that will further reduce tobacco use. Health care cost recovery litigation in the United States resulted in the creation of several tobacco control measures including a ban on tobacco sponsorships, the prohibition of tobacco cartoon characters such as Joe Camel, and further restrictions on youth access to tobacco. These measures have contributed to significant declines in tobacco use in the United States. The Alberta government could demand further restrictions from tobacco companies as part of a judgment against the industry.
  • Health care cost recovery lawsuits help protect public health.
  • Litigation will force tobacco companies to stop acting in ways detrimental to public health, so that in the future the industry will not repeat the behaviour of the past.
  • Health care cost recovery lawsuits benefit the Alberta taxpayer.
  • A lawsuit will benefit taxpayers by obtaining possibly billions of dollars as compensation for health care costs related to tobacco use. The tobacco industry has contributed to the tobacco epidemic, and it should be held responsible for its portion of the clean up costs.
  • Health care cost recovery lawsuits obtain the truth.
  • Health care cost recovery litigation will obtain the truth, through public disclosure of internal tobacco industry documents. Through this we see how the industry has targeted kids and has manipulated their products.
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