
Published Tuesday July 12th, 2011
By ADAM HURAS
The Daily Gleaner
Canada's largest tobacco company says New Brunswick's legal action against several of the country's tobacco manufacturers will cost the province's taxpayers millions of dollars in lawyers' fees.
The provincial government said its lawsuit against tobacco companies is entering a more substantial phase, while a spokesman for the tobacco companies claimed the only winners in the lawsuit will be the lawyers handling the case.
But three years since taking big tobacco to court, the provincial government believes lawyers are moving into the more substantial stages of the legal action.
The province said prospects of both Manitoba and Nova Scotia joining New Brunswick in its legal battle against the tobacco industry to recover health-care costs could also reduce the cost of legal representation.
The Manitoba government said it intends to reach an arrangement with a consortium of law firms hired by the New Brunswick government to handle its province's litigation.
The Nova Scotia government is also seeking a firm to take on its case on a contingency basis.
"We're pleased to work with the other provincial governments towards the recovery of tobacco-related health-care costs," said Justice Department spokesman Paul Harpelle.
"There could be some benefits to taxpayers by consolidating efforts."
The provincial government issued a news release earlier this month heralding the two provinces for joining the legal action against big tobacco.
Attorney General Marie-Claude Blais said in the news release the province welcomed the opportunity to share resources, although neither province has signed on yet.
Big tobacco contests that the lawsuit is only in its infancy.
"At the end of the day the only potential winners will be the lawyers," said Eric Gagnon, a spokesman for Imperial Tobacco Canada.
"We will defend ourselves, and there is not going to be any out-of-court settlement."
Gagnon said Imperial Tobacco Canada has already been locked in a lawsuit with British Columbia for 10 years now, with New Brunswick's suit expected to chart the same course.
New Brunswick was the second province to file suit against tobacco companies.
Named in the action are Rothmans, Benson and Hedges Inc., Philip Morris USA Inc., R.J. Reynolds Tobacco Company, Imperial Tobacco Canada Ltd. and British American Tobacco (Investments) Ltd.
British Columbia was the first, while Newfoundland and Labrador, Nova Scotia, Manitoba and Saskatchewan all have put in place legislation that will enable them to sue.
Ontario also has a lawsuit against big tobacco.
"We think that all of these lawsuits will take years and years," Gagnon said. "It's going to be a lot of years and a lot of taxpayer dollars being spent without any guarantee at the end of the day that taxpayers will see any money ... The biggest loser here will be the taxpayer."
The provincial government declined to elaborate on where the legal battle stands.
Big tobacco maintains that governments across Canada collect approximately $8 billion in taxes from the tobacco industry. New Brunswick collects more than $80 million a year.
The New Brunswick Lung Association has estimated the province's lawsuit against tobacco companies could be worth up to $1 billion.
A consortium of lawyers hired by New Brunswick includes two from the province, several from Ontario and two firms in the United States that have been involved in settlements of state lawsuits.
The lawyers have been retained on a contingency fee, meaning they only get paid if they win or if there's a settlement.
The provincial government has previously stated that the fee won't exceed 30 per cent.
Source: The Daily Gleaner