The tobacco industry has contributed to the tobacco epidemic and it must be held responsible for its portion of the human toll and clean-up costs. As a direct result of decades of tobacco industry wrongful behaviour, publicly-funded healthcare costs resulting from tobacco use are far higher than would otherwise be the case.
Background and current legislation
In 2009, the Alberta government passed the Crown's Right of Recovery Act, which provides the necessary authority for the Alberta government to proceed with litigation against tobacco companies to recover healthcare costs resulting from the industry's negligence and deceptive marketing practices.
On May 30, 2012 the Alberta government commenced a $10 billion healthcare cost-recovery lawsuit against the tobacco industry. The government's statement of claim also includes measures that could require tobacco companies to take remedial action to curb tobacco use in Alberta.
Statement of claim
The government’s statement of claim makes the following assertions about the tobacco industry’s actions:
“4. The Breaches of Duty Include:
(a) deliberately designing Tobacco Products to be highly addictive,
(b) deceiving Albertans by making misrepresentations minimizing the addictiveness of Tobacco Products,
(c) failing and refusing to warn Albertans about the addictiveness of Tobacco Products,
(d) deceiving Albertans by making misrepresentations minimizing the harm associated with Exposure to Tobacco Products, including through second hand smoke,
(e) failing and refusing to research, reveal and remedy the hazards connected with Tobacco Products, and failing to warn Albertans about the harm associated with Exposure to them, including with respect to second hand smoke,
(f) deceiving Albertans by making misrepresentations that light, low tar, mild and filtered Tobacco Products are less harmful and pose less risk of Tobacco-Related Diseases and addiction caused or contributed by Exposure to Tobacco Products, than Tobacco Products not described with those terms,
(g) first falsely denying the health risks of Exposure to Tobacco Products, then concocting and perpetuating a fallacious controversy as to whether there was a real health risk, and ultimately, deceptively minimizing the negative health effects of Exposure to Tobacco Products, including through second hand smoke, and
(h) targeting youth and adolescents with these misrepresentations and deceptions knowing their particular vulnerabilities.”
In out-of-court settlements in 1997 and 1998 in the U.S., the tobacco industry agreed to pay US$245 billion over 25 years which resulted in innovative tobacco control regulations. State governments had initiated healthcare cost recovery lawsuits which proved to be the inspiration for the British Columbia litigation. B.C. was the first province to launch a healthcare cost recovery suit against the tobacco industry. The U.S. experience demonstrates that if Canadian governments persevere, there will be substantial rewards at the end of the day.
The tobacco industry's wrongful and deceptive behaviour
For decades, the Canadian tobacco industry has engaged in numerous deceptive, fraudulent and criminal activities, including:
the promotion of so-called "light" and "mild" cigarettes
adding candy and fruit flavourings to tobacco products which target youth
targeting youth, women and minorities with aggressive marketing campaigns
participating in major contraband tobacco schemes
misrepresenting the harmful nature of tobacco
Tobacco use is the leading preventable cause of disease and premature death in Alberta, resulting in an estimated 3,000 needless deaths annually. Tobacco is the only legal product that kills half of its users when used exactly as intended by its manufacturers.
Reasons to hold the tobacco industry accountable
In terms of the magnitude of preventable harm, no other industry comes close to the tobacco industry. Just as other industries are required to pay for their own clean up costs, the tobacco industry should not be exempt from justice and responsibility. The rationale to move forward with healthcare cost recovery litigation includes:
The tobacco industry should be held liable for the clean-up costs resulting from its misdeeds.
The Alberta government has aggressively pursued clean-up costs from other industries including energy, transportation, manufacturing and insurance. For the past decade, the government has required auto insurers to pay for the healthcare costs resulting from motor vehicle collisions.
The tobacco industry should not get off the hook for the tremendous damage resulting from its deplorable business practices.
The tobacco industry needs to be held accountable for its behaviour.
No industry should be allowed to get away with deceptive and fraudulent practices. These practices will likely continue until the tobacco industry is held fully accountable for its actions. The promotion of light and mild cigarettes is arguably one of the biggest consumer frauds ever devised. The promotion of candy-flavoured tobacco products is a deplorable strategy designed to get kids hooked. A healthcare cost recovery lawsuit will force the industry to change its objectionable behaviour based on the experience in the United States.
Taxpayers are entitled to healthcare damages resulting from the tobacco industry’s negligent and fraudulent behaviour. Tobacco industry negligence and deception have cost Alberta taxpayers billions of dollars in needless healthcare costs. Of course, the human toll resulting from the industry’s deplorable behaviour is immeasurable.
Alberta taxpayers have been paying for the tobacco industry's transgressions for many years. The health care system is under tremendous strain and the tobacco industry has contributed to this burden. It would be fiscally irresponsible for the government to overlook the industry's negligence when Alberta taxpayers have struggled to finance the health care system. Billions of dollars are at stake and the tobacco industry must be held accountable. Tobacco use is estimated to have cost the Alberta health care system $470 million in 2002 alone.
Benefits of healthcare cost recovery litigation
Litigation against the tobacco industry is about more than just obtaining compensation. A lawsuit is also an essential mechanism to reform industry misbehaviour, gain policy measures in the interest of protecting public health and obtain justice for the decades of harm resulting from the industry negligent and deceptive behaviour. The potential benefits of a health care cost recovery lawsuit include:
Healthcare cost recovery lawsuits can help to reduce tobacco use.
Legal action against the industry may lead to the creation of new tobacco control measures that will further reduce tobacco use. Health care cost recovery litigation in the United States resulted in the creation of several tobacco control measures including a ban on tobacco sponsorships, the prohibition of tobacco cartoon characters such as Joe Camel, and further restrictions on youth access to tobacco. These measures have contributed to significant declines in tobacco use in the United States. The Alberta government could demand further restrictions from tobacco companies as part of a judgment against the industry.
Health care cost recovery lawsuits help protect public health.
Litigation will force tobacco companies to stop acting in ways detrimental to public health, so that in the future the industry will not repeat the behaviour of the past.
Health care cost recovery lawsuits benefit the Alberta taxpayer.
A lawsuit will benefit taxpayers by obtaining possibly billions of dollars as compensation for health care costs related to tobacco use. The tobacco industry has contributed to the tobacco epidemic, and it should be held responsible for its portion of the clean-up costs.
Health care cost recovery lawsuits obtain the truth.
Health care cost recovery litigation will obtain the truth through public disclosure of internal tobacco industry documents. Through these documents we see how the industry has targeted kids and has manipulated their products to get more people hooked.
ASH recommends that the Alberta government vigorously pursue justice and compensation from the tobacco industry by continuing with its healthcare cost recovery lawsuit.