Rothmans Inc. Announces Further Details Regarding Supreme Court of Canada Decision

Trading:  TSX:  ROC

TORONTO, Sept. 30 /CNW/ - In the wake of the ruling released yesterday by
the Supreme Court of Canada upholding the constitutional validity of the
Tobacco Damages and Health Care Costs Recovery Act (British Columbia),
Rothmans Inc. provided further details concerning the impact of Thursday's
Supreme Court of Canada decision on the action commenced by the Province of
British Columbia in January of 2001 against Rothmans Inc., Rothmans, Benson &
Hedges Inc. (RBH) and other Canadian and foreign tobacco product
manufacturers.
Although RBH is disappointed with the result of the Supreme Court
decision, RBH believes that it continues to have strong defences to the
Province's claim. To date no substantive court hearings have been held
regarding the merits of the Province's claim as the action had been stayed
pending the outcome of the constitutional challenge. The Supreme Court
decision lifted the stay of the Province's action.
For many years, individual lawsuits brought against tobacco product
manufacturers in foreign jurisdictions failed because the triers of fact were
not convinced that the plaintiffs were unaware of the risks and health hazards
of smoking or whether smoking was the cause of the plaintiff's illness. In its
decision, the Supreme Court expressly stated that "tobacco manufacturers sued
pursuant to the Act will receive a fair civil trial, in the sense that the
concept is traditionally understood: they are entitled to a public hearing,
before an independent and impartial court, in which they may contest the
claims of the plaintiff and adduce evidence in their defence." While the rules
that will be applicable to the B.C. action will, as a result of the Province's
legislation, be unlike any rules ever applied in any Canadian court, RBH
intends to bring before the court hearing the action, all evidence that
supports its position.
In the decision, the Supreme Court left open novel and complex legal
issues which it did not need to resolve to determine the constitutional
validity of the legislation. These issues all but ensure many years of
expensive litigation in which the Province of British Columbia seeks to
recover a level of monetary damages that the Province knows is well beyond the
means of the Canadian tobacco product manufacturers to pay.
Studies prepared for Health Canada have already concluded that British
Columbia receives more in tobacco tax revenue from the sale of tobacco
products in the Province than it spends on related health care. The Supreme
Court's decision did not address the Province's ability to recover monetary
damages in excess of the taxes that it collects.
The Supreme Court of Canada judgment can be found at
www.lexum.umontreal.ca/csc-scc/en under "Recent Judgments".