Historic Tobacco Settlement: A $32.5 Billion Agreement in Canada

Three major tobacco companies, Philip Morris, British American Tobacco, and Japan Tobacco, agreed to a C$32.5 billion settlement to resolve a long-standing lawsuit in Canada. This marks the largest settlement outside the United States, following a Quebec court's previous ruling against the companies for not sufficiently warning smokers of health risks.

In a landmark settlement, Philip Morris, British American Tobacco, and Japan Tobacco have agreed to pay C$32.5 billion to settle a major lawsuit in Canada. The agreement, if approved, will be the largest of its kind outside the U.S., according to a proposed plan by a court-appointed mediator.

The lawsuit dates back to 2015, when a Quebec court awarded damages to around 100,000 smokers and former smokers who claimed the tobacco companies had known about the cancer risks since the 1950s but failed to adequately warn consumers. Despite an appeal, a 2019 ruling upheld the decision, prompting the companies' Canadian subsidiaries to seek bankruptcy protection.

Efforts to finalize the settlement distribution among the tobacco giants continue, with voting on the plan expected in December. While issues remain unresolved, there is hope for a resolution that could set a precedent for manufacturers' duty to warn about product risks, with implications for other sectors such as alcohol.

(With inputs from agencies.)