Tobacco companies’ plans of arrangement approved, claims to begin for class action worth billions

By Anosha Khan ·

Law360 Canada (March 7, 2025, 5:10 PM EST) -- The Ontario Superior Court of Justice has approved the plans of compromise and arrangement for three tobacco companies, which allows the claims process to begin for a class action against them potentially worth billions of dollars.

The Court of Appeal of Quebec has already found that the tobacco giants developed a program of disinformation spanning decades that included developing misleading advertising strategies and maintaining “false scientific controversies” in bad faith as the companies breached their duty to inform.

The defendants in the class action are manufacturers Imperial Tobacco Canada Ltd, Rothmans Benson & Hedges Inc. and JTI-McDonald Corp. Over $4 billion has been reserved for Quebec class members of the class action, upheld in Imperial Tobacco Canada ltée c. Conseil québécois sur le tabac et la santé, 2019 QCCA 358.

Individual compensation amounts could go up to $100,000 for throat or lung cancer and up to $30,000 for emphysema. The Quebec court has ruled that eligible individuals must have been diagnosed before March 12, 2012, and be alive as of November 20, 1998. The class period began Jan. 1, 1950.

Other victims in Canada diagnosed between March 8, 2015 and March 8, 2019 may also receive up to $60,000 in compensation. As well, $1 billion will be allocated to create a charitable foundation dedicated to funding programs aimed at tobacco-related diseases.

The plan allocated over $6 billion to settle all claims against the companies related to tobacco in Canada and over $24 billion to put an end to legal proceedings brought by provinces and territories to recover health-care costs related to tobacco use.

“This court approval brings an end to years of uncertainty and establishes a structured framework for the distribution of funds to victims, their heirs, and governments,” the Quebec Council on Tobacco and Health said in a statement.

“It represents the culmination of more than 25 years of legal proceedings to ensure that tobacco victims receive compensation in recognition of the harm they have suffered.”

The start date for the claims period is yet to be determined and the process will be clarified at a future time. In the coming weeks, eligible beneficiaries including the class members, their heirs and heirs of heirs can submit compensation claims at www.recourstabac.com. 

If you have information, story ideas or news tips for Law360 Canada on business-related law and litigation, including class actions, please contact Anosha Khan at anosha.khan@lexisnexis.ca or 905-415-5838.