Lawsuit gaining traction

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Industry Spotlight Q3 11

Lawsuit gaining traction

Canada

After years of inactivity on the legal front, New Brunswick provincial government has announced that its lawsuit against tobacco companies operating in the province may have entered a new stage.
The government says it is determined to make tobacco companies pay for healthcare costs that are generally associated with tobacco use. However, it is common to see governments in various jurisdictions pursue legal action against tobacco companies in order to wrest additional revenue that could be used to compensate for poor fiscal policies and budgetary shortfalls.

The tobacco companies listed as defendants – Rothmans, Benson and Hedges Inc., Philip Morris USA Inc., R.J. Reynolds Tobacco Company, Imperial Tobacco Canada Ltd. and British American Tobacco (Investments) Ltd. – insist that the lawsuit will cost the province millions of dollars and that taxpayers will end up the biggest losers.
New Brunswick already collects more than US$80 million a year in taxes from the tobacco industry, so its lawsuit may be ill-advised.

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