Canada approves tobacco lawsuits

By Ian Gunn
BBC News, Vancouver

About five million people die each year from smoking-related diseases

The Supreme Court of Canada has ruled that the provincial government can sue the tobacco industry to recover health care costs associated with smoking.

The province of British Columbia filed a suit against several tobacco companies last year.

The industry fought back, arguing the government's case was unconstitutional.

Thursday's ruling means the case can go ahead. It is likely to spark further lawsuits which could cost the industry tens of billions of dollars in Canada.

Unanimous ruling

British Columbia says it spends millions of dollars each year treating people suffering from tobacco-related illness.

Last year, it drafted a law that let it sue tobacco companies in Canada and overseas to recover some of that money.

It based the legislation on a Florida law that has led to huge payouts by tobacco companies in the US.

But the Canadian tobacco industry appealed all the way to the Supreme Court, calling the British Columbia law unconstitutional and arguing it overstepped the powers of a mere provincial government.

The industry also argued that it was unfair for the government to allow the sale of tobacco but then punish companies for doing so.

But the industry has clearly lost its battle here.

The Supreme Court sided unanimously with the province, clearing the way for it to resume its legal action against the tobacco companies.

More lawsuits?

Lawyers for the British Columbia authorities say they will resume their lawsuit immediately.

The case was being watched closely here: as many as eight other governments say they too could launch similar cases in the coming months.

Potential costs from the lawsuit are hard to estimate, as no government has yet announced target figures.

But some observers say damages could run to $7-8bn in the British Columbia case alone.