A Canadian court has approved a significant settlement plan to resolve long-standing lawsuits against major tobacco companies. Philip Morris and British American Tobacco announced that their Canadian units will pay C$32.5 billion, which is about $22.67 billion, to settle claims related to the health impacts of their products.
The lawsuits date back decades, alleging that these companies were aware since the 1950s that their cigarettes could cause cancer and other serious health issues. They are accused of failing to properly inform consumers about the risks associated with smoking.
In 2019, a Quebec court upheld a previous ruling that awarded approximately C$15 billion to around 100,000 smokers and former smokers in the province. This decision led the Canadian divisions of these tobacco companies—Imperial Tobacco Canada, JTI-Macdonald, and Rothmans, Benson & Hedges—to seek bankruptcy protection.
Under the new settlement plan, Philip Morris’ Canadian unit, RBH, will be allowed to keep C$750 million from the initial payment. The plan also includes several operational rules that will guide RBH’s business practices until the settlement amount is fully paid.
Philip Morris stated that any objections to the settlement from its affiliates have been addressed. The plan, which was created with the help of a court-appointed mediator, is set to be implemented in 2025.
British American Tobacco reassured investors that this settlement will not impact its financial outlook for 2025. The court’s decision marks a significant resolution in the ongoing legal battles surrounding tobacco products in Canada.