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Canada government seeks to avoid tobacco liability

OTTAWA, Reuters

10th Feb, 2010

* Tobacco wants Ottawa to share responsibility for costs

* Ottawa wants to overturn decision on possible liability

– The Canadian government asked the Supreme Court this week to overturn British Columbia court rulings that could force it to share financial responsibility for damages caused by tobacco use.

The tobacco industry successfully got the British Columbia Court of Appeals to rule in December that the federal government should be a third-party defendant, meaning it may have to share in possible any liability that may result from lawsuits against the tobacco industry.

The British Columbia provincial government, for instance, is suing the tobacco industry for billions of dollars in health care costs. Another case is a class action by smokers against British American Tobacco’s (BATS.L) Imperial Tobacco Canada Ltd. The claimants allege they were misled into believing cigarettes labeled mild or light were safer to smoke.

The tobacco industry has long argued that government should share in any responsibility for damages because they were partners in the sale of tobacco by keeping it legal and collecting tax revenue from it. And they argue that Ottawa pushed them to promote light cigarettes.

The government filed its application to the Supreme Court of Canada on Monday asking the court to hear an appeal.

Several of Canada’s provinces have sued the industry for billions in damages, but the main British Columbia case — based on legal action by U.S. states — was filed first and is being used as the lead case in the Canadian courts.

Rob Cunningham of the anti-tobacco Canadian Cancer Society, said the federal government should not be asked to pay for tobacco costs.

“The tobacco industry is the cause of the wrongs and the tobacco epidemic, and they shouldn’t be trying to shift responsibility onto someone else,” he said. (Reporting by Randall Palmer; editing by Peter Galloway)

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