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1998 Legislative Session: 3rd Session, 36th Parliament

THIRD READING

The following electronic version is for informational purposes only.

The printed version remains the official version.

Certified correct as passed Third Reading on the 30th day of July, 1998

Ian D. Izard, Law Clerk

HONOURABLE PENNY PRIDDY

MINISTER OF HEALTH AND MINISTER

RESPONSIBLE FOR SENIORS

BILL 30 – 1998

TOBACCO DAMAGES RECOVERY

AMENDMENT ACT, 1998

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province

of British Columbia, enacts as follows:

1 The Tobacco Damages Recovery Act, S.B.C. 1997, c. 41, is amended by repealing the title

and substituting the following:

TOBACCO DAMAGES AND HEALTH CARE COSTS

RECOVERY ACT .

Section 1 is amended

(

a) by adding the following definition:

"affiliate" means affiliate as defined in

section 1 of the Company Act; ,

(

b) in the definition of "cost of future health care benefits" by striking out "disease,"

and substituting "tobacco related disease," ,

(

c) in the definition of "cost of past health care benefits" by striking out "disease" and

substituting "tobacco related disease" ,

(

d) by repealing the definition of "disease" ,

(

e) by repealing the definition of "exposure" and substituting the following:

"exposure" means any contact with, or ingestion, inhalation or assimilation of, a

tobacco product, including any smoke or other by-product of the use,

consumption or combustion of a tobacco product; ,

(

f) by adding the following

definitions:

"joint venture" means an association of 2 or more persons, if

(

a) the relationship among the persons does not constitute a corporation, a

partnership or a trust, and

(

b) the persons each have an undivided interest in assets of the association;

"manufacture" includes, for a tobacco product, the production, assembly or

packaging of the tobacco product; ,

(

g) by repealing the definition of "manufacturer" and substituting the following:

"manufacturer" means a person who manufactures or has manufactured a tobacco

product and includes a person who currently or in the past

(

a) causes, directly or indirectly, through arrangements with contractors,

subcontractors, licensees, franchisees or others, the manufacture of a

tobacco product,

(

b) owns a trade-mark, trade name or brand name, registered or not, under

which a tobacco product is promoted to the public,

(

c) is related to a person described in this definition and has a right to use a

trade-mark, trade name or brand name, registered or not, for the purpose of

promoting a tobacco product to the public,

(

d) for any fiscal year of the person, generates at least 10% of its worldwide

revenues, determined on a consolidated basis in accordance with generally

accepted accounting principles in Canada, from the manufacture or

promotion of tobacco products,

(

e) is related to a person described in this definition and is engaged in, or

causes, directly or indirectly, other persons to engage in the promotion of a

tobacco product, or

(

f) is a trade association primarily engaged in

(

i) the advancement of the interests of manufacturers,

(ii) the promotion of a tobacco product, or

(iii) causing, directly or indirectly, other persons to engage in the

promotion of a tobacco product; ,

(

h) by adding the following

definitions:

"person" includes a trust, joint venture or trade association;

"promote" or "promotion" includes, for a tobacco product, the marketing, distribution

or sale of the tobacco product and research with respect to the tobacco

product; ,

(

i) by repealing the definition of "tobacco product" and substituting the following:

"tobacco product" means tobacco and any product that includes tobacco; ,

(

j) by adding the following

definitions:

"tobacco related disease" means a disease caused or contributed to by exposure to

a tobacco product;

"type of tobacco product" means one or a combination of the following categories:

(

a) cigarettes;

(

b) loose tobacco intended for incorporation into cigarettes;

(

c) cigars;

(

d) cigarillos;

(

e) pipe tobacco;

(

f) chewing tobacco;

(

g) nasal snuff;

(

h) oral snuff;

(

i) a prescribed form of tobacco; ,

(

k) by repealing the definition of "tobacco related wrong" and substituting the

following:

"tobacco related wrong" means a tort or breach of a common law, equitable or

statutory duty or obligation owed by a manufacturer to persons who have been

exposed or might become exposed to a tobacco product that causes or

contributes to disease. , and

(

l) by renumbering the

section as

section 1 (1) and by adding the following subsections:

(2) For the purposes of this Act, a person is related to another person if, directly or

indirectly, the person is an affiliate of the other person or of an affiliate of the

other person.

(3) For the purposes of subsection (2), a person is deemed to be an affiliate of another

person if the person

(

a) is a corporation and the other person, or a group of persons not dealing with

each other at arm's length of which the other person is a member, owns a

beneficial interest in shares of the corporation

(

i) carrying at least 50% of the votes for the election of directors of the

corporation and the votes carried by the shares are sufficient, if

exercised, to elect a director of the corporation, or

(ii) having a fair market value, including a premium for control if

applicable, of at least 50% of the fair market value of all the issued

and outstanding shares of the corporation, or

(

b) is a partnership, trust or joint venture and the other person, or a group of

persons not dealing with each other at arm's length of which the other

person is a member, has an ownership interest in the assets of that person

that entitles the other person or group to receive at least 50% of the profits

or at least 50% of the assets on dissolution, winding up or termination of the

partnership, trust or joint venture.

(4) For the purposes of subsection (2), a person is deemed to be an affiliate of another

person if the other person, or a group of persons not dealing with each other at

arm's length of which the other person is a member, has any direct or indirect

influence that, if exercised, would result in control in fact of that person except if

the other person deals at arm's length with that person and derives influence

solely as a lender.

(5) For the purposes of determining the market share of a defendant manufacturer for

a type of tobacco product sold in British Columbia, the court must

(

a) consider the defendant manufacturer and the manufacturers related to that

defendant manufacturer to be one manufacturer, and

(

b) calculate the defendant manufacturer's market share for the type of tobacco

product by the following formula:

dms =

x 100%

where

dms = the defendant manufacturer's market share for the type of tobacco product from

the date of the earliest tobacco related wrong committed by that defendant

manufacturer to the date of trial;

dm = the quantity of the type of tobacco product manufactured or promoted by the

defendant manufacturer that is sold within British Columbia from the date of the

earliest tobacco related wrong committed by that defendant manufacturer to the

date of trial;

MM = the quantity of the type of tobacco product manufactured or promoted by all

manufacturers that is sold within British Columbia from the date of the earliest

tobacco related wrong committed by the defendant manufacturer to the date of

trial; .

3 Sections 13 and 14 are repealed and the following substituted:

Direct action by government

(1) Despite the government having the right to commence or having commenced an

action under

section 9 or having a right of recovery under

section 11, the

government has a direct and distinct action against a manufacturer to recover the

cost of health care benefits that have been incurred, or will be incurred, by the

government resulting from a tobacco related wrong.

(2) An action under subsection (1) is brought by the government in its own right and

not on the basis of a subrogated claim.

(3) In an action under subsection (1), the government may recover the cost of health

care benefits whether or not there has been any recovery by other persons who

have suffered damage resulting from the tobacco related wrong committed by the

person against whom the government's action is brought.

(4) If an action under subsection (1) is commenced, any benefits claim brought under

section 5, or actions under

section 9, must be stayed to the extent necessary to

prevent double recovery.

(5) In an action under subsection (1), the government may recover the cost of health

care benefits

(

a) that have been provided or will be provided to particular individual insured

persons, or

(

b) on an aggregate basis, that have been provided or will be provided to that

portion of the population of insured persons who have suffered disease as a

result of exposure to a type of tobacco product.

(6) If the government seeks in an action under subsection (1) to recover the cost of

health care benefits on an aggregate basis,

(

a) it is not necessary

(

i) to identify particular individual insured persons,

(ii) to prove the cause of disease in any particular individual insured

person, or

(iii) to prove the cost of health care benefits that have been provided or

will be provided to any particular individual insured person,

(

b) the health care records and documents of particular individual insured

persons or the documents relating to the provision of health care benefits to

particular individual insured persons are not compellable except as

provided under a rule of law, practice or procedure that requires the

production of documents relied on by an expert witness,

(

c) no person is compellable to answer questions with respect to the health of,

or the provision of health care benefits to, particular individual insured

persons,

(

d) despite paragraphs (

b) and (c), on application by a defendant, the court may

order discovery of a statistically meaningful sample of the documents

referred to in paragraph (

b) and the order must include directions

concerning the nature, level of detail and type of information to be

disclosed, and

(

e) if an order is made under paragraph (d), the identity of particular individual

insured persons must not be disclosed and all identifiers that disclose or

may be used to trace the names or identities of any particular individual

insured persons must be deleted from any documents that are disclosed.

Recovery of cost of health care benefits on aggregate basis

13.1

(1) In an action under

section 13 for the recovery of the cost of health care benefits

on an aggregate basis, subsection (2) applies if the government proves, on a

balance of probabilities, that, in respect of a type of tobacco product,

(

a) the defendant manufacturer breached a common law, equitable or statutory

duty or obligation owed to persons who have been exposed or might become

exposed to the type of tobacco product,

(

b) exposure to the type of tobacco product can cause or contribute to disease,

and

(

c) during all or part of the period of the breach referred to in paragraph (a), the

type of tobacco product, manufactured or promoted by the defendant

manufacturer or the manufacturers related to the defendant manufacturer,

was offered for sale in British Columbia.

(2) Subject to subsections (1) and (4), the court must presume that

(

a) the population of insured persons who were exposed to a tobacco product,

manufactured or promoted by the defendant manufacturer or the manufacturers

related to the defendant manufacturer, would not have been exposed

to the product but for the breach referred to in subsection (1) (a), and

(

b) the exposure described in paragraph (

a) caused or contributed to disease in

a portion of the population described in paragraph (a).

(3) If the presumptions under subsection (2) (

a) and (

b) apply,

(

a) the court must determine the aggregate cost of health care benefits that have

been, or will be, provided after the date of the breach referred to in

subsection (1) (

a) resulting from disease caused or contributed to by

exposure to a type of tobacco product, and

(

b) each defendant manufacturer to which the presumptions apply is liable for

the proportion of the aggregate cost referred to in paragraph (

a) equal to its

market share in that type of tobacco product.

(4) The amount of a defendant manufacturer's liability assessed under subsection

(3) (

b) may be reduced, or the proportions of liability assessed under subsection

(3) (

b) readjusted amongst the defendant manufacturers, to the extent that a

defendant manufacturer proves, on a balance of probabilities, that the breach

referred to in subsection (1) (

a) did not cause or contribute to the exposure

referred to in subsection (2) (

a) or to the disease referred to in subsection (2) (b).

Joint and several liability

13.2 Despite

section 13.1, if the government establishes that 2 or more defendant manufacturers

committed a tobacco related wrong in concert, the liability of those defendant

manufacturers is joint and several.

Population based evidence to establish causation and quantify damages or cost

14 Statistical information and information derived from epidemiological, sociological

and other relevant studies, including information derived from sampling, is admissible

as evidence for the purposes of establishing causation and quantifying damages or the

cost of health care benefits respecting a tobacco related wrong in an action brought

(

a) by or on behalf of an insured person in the person's own name or as a

member of a class of persons under the Class Proceedings Act , or

(

b) by the government under

section 9 or 13.

Section 15 (1) is amended by striking out "including" and substituting "or".

Section 16 is repealed and the following substituted:

Liability based on risk contribution

(1) This

section does not apply to an action under

section 13 for the recovery of the

cost of health care benefits on an aggregate basis.

(2) If a plaintiff is unable to establish which defendant manufacturer caused or

contributed to the exposure described in paragraph (

b) and, as a result of a breach

of a common law, equitable or statutory duty or obligation,

(

a) one or more defendant manufacturers causes or contributes to a risk of

disease by exposing persons to a type of tobacco product, and

(

b) the plaintiff has been exposed to the type of tobacco product referred to in

paragraph (

a) and suffers disease as a result of the exposure,

the court may find each defendant manufacturer that caused or contributed to the

risk of disease liable for a proportion of the damages or cost of health care

benefits incurred equal to the proportion of its contribution to that risk of disease.

(3) The court may consider the following in apportioning liability under

subsection (2):

(

a) the length of time a defendant manufacturer or the manufacturers related to

the defendant manufacturer engaged in the conduct that caused or

contributed to the risk of disease;

(

b) the market share the defendant manufacturer had in the type of tobacco

product that caused or contributed to the risk of disease;

(

c) the degree of toxicity of any toxic substance in the type of tobacco product

manufactured or promoted by a defendant manufacturer or the manufacturers

related to the defendant manufacturer;

(

d) the amount spent by a defendant or the manufacturers related to the

defendant manufacturer on promoting the type of tobacco product that

caused or contributed to the risk of disease;

(

e) the degree to which a defendant manufacturer collaborated or acted in

concert with other manufacturers in any conduct that caused, contributed to

or aggravated the risk of disease;

(

f) the extent to which a defendant manufacturer or the manufacturers related

to the defendant manufacturer conducted tests and studies to determine the

risk of disease resulting from exposure to the type of tobacco product;

(

g) the extent to which a defendant manufacturer or the manufacturers related

to the defendant manufacturer assumed a leadership role in manufacturing

or promoting the type of tobacco product;

(

h) the efforts a defendant manufacturer or the manufacturers related to the

defendant manufacturer made to warn the public about the risk of disease

resulting from exposure to the type of tobacco product;

(

i) the extent to which a defendant manufacturer or the manufacturers related

to the defendant manufacturer continued manufacture or promotion of the

type of tobacco product after it knew or ought to have known of the risk of

disease resulting from exposure to the type of tobacco product;

(

j) affirmative steps that a defendant manufacturer or the manufacturers related

to the defendant manufacturer took to reduce the risk of disease to the

public;

(

k) other considerations considered relevant by the court.

Section 17 (2) is repealed and the following substituted:

(2) Despite the Negligence Act and subject to

section 18 (5) of this Act, all defendant

manufacturers who are found liable for the same tobacco related wrong are

jointly and severally liable for all the damages or the cost of health care benefits

suffered as a result of that wrong.

7 The following

section is added:

Joint and several liability for related manufacturers and for manufacturers acquiring the

tobacco related part of the business of other manufacturers

17.1

(1) A court must consider all related manufacturers

(

a) to be one manufacturer for the purposes of establishing a tobacco related

wrong, and

(

b) to be jointly and severally liable for the tobacco related wrongs committed

by any of the related manufacturers.

(2) A manufacturer that has purchased, leased or otherwise acquired any tobacco

related part of a business of another manufacturer is jointly and severally liable

with the other manufacturer for the tobacco related wrongs committed by that

other manufacturer in the course of that business.

Section 18 (2), (3) and (5) (

c) is amended by striking out "damages" wherever it appears

and substituting "damages or the cost of health care benefits" .

Section 19 (2) is amended by adding the following paragraph:

(b.1) prescribing a form of tobacco for the purposes of paragraph (

i) of the

definition of "type of tobacco product" in

section 1; .

Section 20 is amended by renumbering the

section as

section 20 (1) and by adding the

following subsection:

(2) When brought into force under subsection (1), a provision of this Act has the

retroactive effect necessary to give the provision full effect for all purposes

including allowing

(

a) a benefits claim to be included under

section 5 in an action, or

(

b) an action to be brought under

section 9 or 13,

arising from a tobacco related wrong, whenever it occurred.

Commencement

11 This Act comes into force by regulation of the Lieutenant Governor in Council.

Copyright

© 1998: Queen's Printer, Victoria, British Columbia, Canada