The move follows a landmark $32.5-billion settlement involving three tobacco companies
The Ontario Superior Court of Justice approved $909 million in class counsel fees for lawyers who litigated various claims against tobacco companies across three decades, stating that while the lawyers’ fee request was “unheard of in Canadian legal history,” the court could not find “a principled basis” on which to reduce the fee, either.
In his endorsement on Monday, Chief Justice Geoffrey Morawetz instructed lawyers for Quebec-based smokers – who will receive a $900 million share of the total class counsel fees – to set aside a portion of their fees to make up for any shortfalls in class members’ payouts.
Those lawyers “have unquestionably acted in a way that has fully discharged their obligations to the class,” Morawetz wrote. “A truly outstanding result has been obtained for the class in a case in which [Quebec class action plaintiffs’] counsel took on an exceptional risk.”
However, the chief justice warned that the case is unique and that the exceptional class counsel fees he awarded “should never be considered to have any precedential value.”
Morawetz’s endorsement concerned three motions to approve class counsel fees. The three groups of lawyers represented Quebec smokers, British Columbia consumers, and Ontario tobacco producers in separate class actions against multiple tobacco companies.
Fees for the lawyers representing the Quebec plaintiffs
According to Morawetz’s endorsement, lawyers for the Quebec plaintiffs asked for $901,177,915 in class counsel fees.
The lawyers began representing the Quebec plaintiffs in 1998, pursuing two class actions against three tobacco companies – JTI-Macdonald Corp., Imperial Tobacco Canada Limited and Imperial Tobacco Company Limited, and Rothmans, Benson & Hedges Inc. – on behalf of Quebec smokers who were addicted to nicotine and those who had been diagnosed with lung cancer, throat cancer, emphysema or chronic obstructive pulmonary disease.
The Quebec Superior Court ruled in favour of the plaintiffs in 2015, awarding damages against the tobacco companies, and the Quebec Court of Appeal upheld the trial court’s ruling in 2019.
However, three weeks later, the three tobacco companies filed for insolvency protection. After years of mediation, Morawetz approved a plan on March 6 for the companies to pay out a total of $32.5 billion to creditors, including the Quebec plaintiffs and provincial and territorial governments seeking to recover smoking-related health-care costs.
Lawyers for the Quebec plaintiffs said the $900 million they sought in class counsel fees represents 22 percent of the roughly $4 billion allocated to the plaintiffs under the March 6 plan. They said that since being retained by the plaintiffs 26 years ago, they have dedicated more than 203,849 hours to the case and anticipate logging another 8,000 hours before the March 6 plan is fully implemented.
The lawyers argued that they took a huge risk by representing the plaintiffs, since tobacco companies had not previously been held liable for the harms their products caused. They further argued that they continued to work on the cases despite the considerable risk that they would never get paid, since the tobacco companies filed for insolvency.
In assessing the lawyers’ arguments, Morawetz weighed submissions by other parties, including the province of Quebec and the Canadian Cancer Society. While Quebec worried that paying out $900 million in class counsel fees would greatly reduce the amount of money available to class members, counsel for the Canadian Cancer Society, which was not affiliated with the cases, supported the requested fees, arguing that the class actions’ “outcome is an enormous global world precedent.”
The lawyer added that class counsel for the Quebec plaintiffs “have achieved against the tobacco industry what no one else has ever achieved anywhere in the world with cases going back to the 1950s. They have surmounted impossible odds in the face of incredible risk.”
Morawetz acknowledged that the Quebec lawyers’ requested fee was “astronomical.” However, he stated that “the work was well done and produced an exceptional result.
“The risk assumed by [Quebec class action plaintiffs’] counsel was significant and a premium, by way of a multiplier, is, in my view, justified,” Morawetz added.
In a postscript, Morawetz encouraged class counsel to consider “publicly making a meaningful and significant contribution to a health-related charity of their choice.”
Fees for the lawyers representing the BC and Ontario plaintiffs
Lawyers for the BC plaintiffs sued Imperial in 2003 and sought $5 million in legal fees. Certified in 2005, the class action accused Imperial of misleading customers by advertising their “light” and “mild” cigarettes as healthier smoking products.
The class counsel fees sought by the lawyers represent approximately 33 percent of the $15 million awarded to class members. The lawyers also requested $10,000 for the lead plaintiff in the case, Kenneth Knight, and approximately $1 million for disbursements.
Lawyers for the Ontario plaintiffs – tobacco producers who accused the three tobacco companies of failing to pay the appropriate price for tobacco used in products sold in Canada – meanwhile sought $3.75 million in class counsel fees. This represents 25 percent of the $15 million they recovered for class members.
Morawetz approved both requests, stating that he considered the result achieved, risk, complexity, and importance of the matter to class members in both cases.
In a statement on Tuesday, David Klein of Klein Lawyers LLP, one of the lawyers who represented the BC plaintiffs, said, “The fee award to Quebec counsel is well deserved. They actively litigated the case for over 25 years and achieved an impressive result against determined and highly resourced defendants.
“Though the fee is high, they earned it,” Klein added.
David Klein, Doug Lennox
Doug Lennox, from the same firm, said of the BC case, “We are pleased with the decision. It brings to a conclusion 22 years of hard work.”
William Sasso of Strosberg Wingfield Sasso LLP, who represented the Ontario Flue-Cured Tobacco Growers' Marketing Board, noted that the Quebec lawyers’ fee request and Morawetz’s approval were unprecedented in Canadian legal history.
Counsel for the Quebec plaintiffs – who included lawyers from Trudel Johnston & Lespérance, Fishman Flanz Meland Paquin LLP, and Chaitons LLP – did not respond to a request for comment.
