In a landmark decision, Quebec plaintiffs’ counsel in a class action lawsuit against major tobacco companies—JTI-Macdonald Corp., Imperial Tobacco Canada Ltd., and Rothmans, Benson & Hedges Inc.—were awarded nearly CA$1 billion in legal fees, described as “unheard of in Canadian legal history.” This ruling, made by Ontario Superior Court Chief Justice Geoffrey Morawetz on August 27, 2025, follows a nearly three-decade legal battle that culminated in a historic $32.5 billion settlement. Below is a detailed breakdown of the case, the fee award, and its implications, based on available information.
Background of the Case
- Origin and Scope: The litigation began in 1998 when two class action lawsuits were filed in Quebec Superior Court on behalf of approximately 100,000 Quebec smokers and ex-smokers. The plaintiffs, represented by four law firms—Trudel Johnston & Lespérance, De Grandpré Chait, Kugler Kandestin, and Fishman Flanz Meland Paquin—alleged that the tobacco companies knowingly misled consumers about the health risks of smoking, including cancer, emphysema, and addiction, since the 1950s. The lawsuits, known as the Blais and Létourneau cases, sought compensation for smokers diagnosed with lung cancer, throat cancer, emphysema, or chronic obstructive pulmonary disease (COPD), and those addicted to nicotine.
- Legal Milestones:
- 2015 Ruling: Quebec Superior Court Justice Brian Riordan ordered the tobacco companies to pay $15.6 billion in moral and punitive damages to the plaintiffs, marking the largest class action award in Canadian history.
- 2019 Appeal: The Quebec Court of Appeal upheld the 2015 ruling with minor modifications, increasing the total liability to nearly $17 billion with interest. The tobacco companies then sought creditor protection under the Companies’ Creditors Arrangement Act (CCAA) in Ontario, suspending payments and legal proceedings.
- 2024 Settlement: After years of mediation, a $32.5 billion pan-Canadian settlement was proposed in October 2024 and approved by Ontario Superior Court in March 2025. This included over $4 billion for Quebec plaintiffs, $24 billion for provincial and territorial governments to recover smoking-related healthcare costs, $2.5 billion for other Canadian smokers, and $1 billion for a foundation to combat tobacco-related diseases.
The Fee Award
- Amount and Approval: The Ontario Superior Court approved $909 million in class counsel fees, with $901,177,915 allocated to the Quebec plaintiffs’ counsel. This fee, representing 22% of the $4 billion awarded to Quebec class members, was deemed “astronomical” but “reasonable” by Justice Morawetz, given the extraordinary risk, complexity, and duration of the case.
- Justification:
- Risk and Effort: The lawyers worked over 200,000 hours over 27 years, including a trial lasting more than 250 days, without payment, shouldering significant financial risks. Some firms took out personal and professional loans to sustain the litigation.
- Contingency Fee: The original agreement in 1998 set a 20% contingency fee, with an additional 2% added in 2017 for further services, aligning with Quebec’s typical 20-25% range for class actions.
- Results Achieved: The “truly outstanding” outcome secured significant compensation for victims, setting a benchmark for holding corporations accountable. A $50 million reserve from the fees was set aside for potential shortfalls in class members’ payouts.
- No Precedential Value: Justice Morawetz emphasized that the fee award’s size was unique to this case’s scale and should not set a precedent for future class actions.
Implications and Reactions
- For Policyholders and Victims:
- The settlement provides up to $100,000 per Quebec plaintiff diagnosed with specified diseases between certain dates, with claims processes starting August 29, 2025. An additional $130 per person was awarded for addicted smokers in the Létourneau case.
- The ruling ends years of uncertainty for victims, many of whom passed away during the prolonged litigation.
- Industry Perspective:
- Lawyers like David Klein and Doug Lennox praised the Quebec counsel’s perseverance against well-resourced defendants, noting the fee was “well deserved” for achieving an “impressive result.”
- The tobacco companies, while disappointed, argued that public awareness of smoking risks since the 1950s should mitigate their liability. They sought creditor protection to negotiate the settlement, avoiding bankruptcy.
- Public Health Advocacy:
- Anti-smoking advocates, including the Canadian Cancer Society and the Coalition québécoise pour le contrôle du tabac, criticized the settlement for lacking measures to restrict tobacco marketing or sales, calling it a “gigantic cash grab” without protecting future generations. They urged provinces to invest the $24 billion in tobacco-reduction programs, given the 46,000 annual tobacco-related deaths in Canada.
- Legal Community:
- The fee award sparked debate in class-action circles about incentivizing high-risk litigation versus ensuring reasonable legal costs. Morawetz’s ruling acknowledged the need for strong incentives for firms to take on such cases but cautioned against viewing the fee as a standard.
Critical Considerations
- Unprecedented Scale: The $909 million fee, while proportional to the $32.5 billion settlement, reflects the case’s unique scope—described as Canada’s longest and largest class action. Critics argue the fee size could fuel public skepticism about class-action profiteering, though the lawyers’ decades-long unpaid commitment counters this.
- Tobacco Industry Tactics: The plaintiffs’ counsel faced relentless legal challenges, including 50 interim motions to the Quebec Court of Appeal, highlighting Big Tobacco’s strategy to delay and obstruct. Confidential documents revealed a “program of disinformation” where companies concealed known health risks for decades.
- Future Implications: While the settlement compensates victims, the absence of new regulatory measures in the deal raises concerns about ongoing tobacco industry practices. The $1 billion foundation for tobacco-related disease prevention is a step forward, but advocates argue it’s insufficient without broader policy changes.
Conclusion
The nearly CA$1 billion fee awarded to Quebec plaintiffs’ counsel is a historic milestone, reflecting the immense risk, effort, and success in securing a $32.5 billion settlement against Big Tobacco. While the fee is unprecedented, it is justified by the case’s complexity, duration, and impact, providing substantial compensation to victims and funds for public health. However, the lack of preventive measures in the settlement underscores ongoing challenges in curbing tobacco use. For further details on the claims process, visit www.tobaccoclaimscanada.ca or www.recourstabac.com.
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