The Canadian affiliates of three tobacco giants, including Stamford-based Phillip Morris International, have agreed to settle long-running lawsuits in Canada for a total of about $22.7 billion, PMI announced Friday morning.
The lawsuits involve PMI’s Canadian unit, Rothmans, Benson & Hedges Inc., along with Imperial Tobacco Canada and JTI-Macdonald Corp., the Canadian units of British American Tobacco and Japan Tobacco, respectively.
The settlement resolves all tobacco product-related claims and litigation in Canada against PMI and its Canadian unit, according to the announcement.
“After years of mediation to resolve long-pending tobacco product-related litigation in Canada, PMI is pleased that this legal process will now draw to a close, allowing (Rothmans, Benson & Hedges) and its stakeholders to focus on the future,” the announcement states.
A Canadian court has approved the plan, which allows Rothmans, Benson & Hedges to retain about $525 million in accumulated cash.
Also, Rothmans, Benson & Hedges will obtain a release of claims relating to its combustible and traditional smokeless tobacco products. Related litigation would also be dismissed.
Rothmans, Benson & Hedges will maintain its alternative nicotine business, which includes heat-not-burn, e-vapor and pouch products, separately from its combustible business, as part of the agreement.
The plan is expected to be implemented and take effect this year.
The settlement amount was thought to be the largest of its kind outside the United States, according to a report from Reuters last year, before the settlement was approved.
According to Reuters, the Canadian units of the “Big Three” tobacco companies were sued by around 100,000 smokers and ex-smokers who alleged the companies knew since the 1950s their product was causing cancer and other illnesses, and failed to warn consumers adequately.
In 2015, a Quebec court awarded damages of about $10.4 billion, forcing the Canadian subsidiaries of the three cigarette-makers to seek bankruptcy protection.
Since then, the subsidiaries were under a court-supervised mediation process negotiating a possible settlement.