Judge extends order suspending legal proceedings against three tobacco companies

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TORONTO — An Ontario court has extended an order suspending legal proceedings against three major tobacco companies as they try to negotiate a settlement with their creditors.

Ontario Superior Court Justice Thomas McEwen told a Toronto court this morning there would be “no prejudice to any stakeholder” from extending the stay to Sept. 30.

The extension was requested by the companies _ JTI-Macdonald Corp., Rothmans, Benson & Hedges and Imperial Tobacco Canada Ltd. _ and was not opposed by any of the parties. The stay was previously set to expire next month.

A lawyer for Imperial Tobacco said the longer timeline is necessary for the mediation efforts to progress, and noted “significant developments” have already taken place.

The order to suspend legal proceedings against the three tobacco giants was first granted nearly a year ago after the companies lost an appeal in a landmark class-action lawsuit in Quebec.

The stay is meant to preserve the status quo while the companies work out a global settlement with the class-action members and several other creditors, including a number of provincial governments seeking to recover smoking-related health-care costs.

A lawyer representing the Quebec plaintiffs said that while they consented to the extension, “the urgency has not abated” when it comes to reaching a settlement.

“People are continuing to die at an alarming rate,” as a result of smoking-related health issues, Mark Meland said.

He said a deal should be ready the next time the case comes before the court. “We believe that a resolution can be achieved well before Sept. 30,” he said.

Rob Cunningham, who represents the Canadian Cancer Society, raised concerns outside court over the secrecy surrounding the mediation process. The talks are confidential and the organization was not given permission to participate in them.

Cunningham said there is currently no way to know whether public health concerns are being discussed as part of the settlement.

“What are the measures there to prevent the tobacco industry in the future from repeating the wrongful behaviour of the past?” he said. “There needs to be effective mechanisms to prevent the wrongful activities of tobacco companies that have been very damaging for public health. And so that’s essential as part of any settlement agreement.”

Paola Loriggio, The Canadian Press