Bill 155, Tobacco Damages and Health Care Costs Recovery Act, 2009

Versions

Bill 155 2009

An Act to permit the Province to recover damages and health care costs incurred because of tobacco related diseases and to make a complementary amendment to the Limitations Act, 2002

Note: This Act amends the Limitations Act, 2002. For the legislative history of the Act, see the Table of Consolidated Public Statutes – Detailed Legislative History at www.e-Laws.gov.on.ca.

CONTENTS

10.

11.

12.

13.

14.

Definitions and interpretation

Direct action by Crown

Recovery of cost of health care benefits on aggregate basis

Joint and several liability in an action under s. 2 (1)

Population-based evidence to establish causation and quantify damages or cost

Limitation periods

Apportioning liability

Apportionment of liability in tobacco related wrongs

Regulations

Retroactive effect

Amendment

Limitations Act, 2002

Commencement

Short title

___________

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

Definitions and interpretation

1. (1) In this Act,

"cost of health care benefits" means the sum of,

(a) the present value of the total expenditure by the Crown in right of Ontario for health care benefits provided for insured persons resulting from tobacco related disease or the risk of tobacco related disease, and

(b) the present value of the estimated total expenditure by the Crown in right of Ontario for health care benefits that could reasonably be expected will be provided for those insured persons resulting from tobacco related disease or the risk of tobacco related disease; ("coût des prestations de soins de santé")

"disease" includes general deterioration of health; ("maladie")

"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; ("exposition", "exposer")

"health care benefits" means,

(a) payments under the Charitable Institutions Act,

(b) payments under the Health Insurance Act,

(d) payments under the Homes for the Aged and Rest Homes Act,

(e) payments under the Independent Health Facilities Act,

(f) payments under the Local Health System Integration Act, 2006,

(g) payments under the Long-Term Care, 1994,

(h) payments under the Nursing Homes Act,

(i) payments under the Ontario Drug Benefit Act,

(j) payments under the Public Hospitals Act, and

(k) other expenditures, made directly or through one or more agents or other intermediate bodies, by the Crown in right of Ontario for programs, services, benefits or similar matters associated with disease; ("prestations de soins de santé")

"insured person" means,

(a) a person, including a deceased person, for whom health care benefits have been provided, or

(b) a person for whom health care benefits could reasonably be expected will be provided; ("assuré")

"joint venture" means an association of two 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; ("coentreprise")

"manufacture" includes, for a tobacco product, the production, assembly or packaging of the tobacco product; ("fabrication", "fabriquer")

"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) for any fiscal year of the person, derives at least 10 per cent of revenues, determined on a consolidated basis in accordance with generally accepted accounting principles in Canada, from the manufacture or promotion of tobacco products by that person or by other persons,

(d) 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; ("fabricant")

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

"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; ("promouvoir", "promotion")

"tobacco product" means tobacco and any product that includes tobacco; ("produit du tabac")

"tobacco related disease" means disease caused or contributed to by exposure to a tobacco product; ("maladie liée au tabac")

"tobacco related wrong" means,

(a) a tort committed in Ontario by a manufacturer which causes or contributes to tobacco related disease, or

(b) in an action under subsection 2 (1), a breach of a common law, equitable or statutory duty or obligation owed by a manufacturer to persons in Ontario who have been exposed or might become exposed to a tobacco product; ("faute d'un fabricant")

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

(a) cigarettes,

(b) loose tobacco intended for incorporation into cigarettes,

(d) cigarillos,

(e) pipe tobacco,

(f) chewing tobacco,

(g) nasal snuff,

(h) oral snuff, and

(i) a prescribed form of tobacco. ("type de produit du tabac")

"Manufacturer", exclusions

(2) The definition of "manufacturer" in subsection (1) does not include,

(a) an individual;

(b) a person who,

(i) is a manufacturer only because they are a wholesaler or retailer of tobacco products, and

(ii) is not related to,

(A) a person who manufactures a tobacco product, or

(B) a person described in clause (a) of the definition of "manufacturer"; or

(i) is a manufacturer only because clause (b) or (c) of the definition of "manufacturer" applies to the person, and

(ii) is not related to,

(A) a person who manufactures a tobacco product, or

(B) a person described in clause (a) or (d) of the definition of "manufacturer".

Meaning of "related"

(3) For the purposes of subsection (2), a person is related to another person if, directly or indirectly, the person is,

(a) an affiliate, as defined in section 1 of the Business Corporations Act, of the other person, or

(b) an affiliate of the other person or an affiliate of an affiliate of the other person.

Meaning of "affiliate"

(4) For the purposes of clause (3) (b), 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 per cent 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 per cent 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 per cent of the profits or at least 50 per cent of the assets on dissolution, winding up or termination of the partnership, trust or joint venture.

Deemed affiliate

(5) For the purposes of clause (3) (b), 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.

Formula for determining market share

(6) For the purposes of determining the market share of a defendant for a type of tobacco product sold in Ontario, the court shall calculate the defendant's market share for the type of tobacco product by the following formula:

where,

dms = the defendant's market share for the type of tobacco product from the date of the earliest tobacco related wrong committed by that defendant to the date of trial,

dm = the quantity of the type of tobacco product manufactured or promoted by the defendant that is sold within Ontario from the date of the earliest tobacco related wrong committed by that defendant to the date of trial,

MM = the quantity of the type of tobacco product manufactured or promoted by all manufacturers that is sold within Ontario from the date of the earliest tobacco related wrong committed by the defendant to the date of trial.

Direct action by Crown

2. (1) The Crown in right of Ontario has a direct and distinct action against a manufacturer to recover the cost of health care benefits caused or contributed to by a tobacco related wrong.

Action not subrogated

(2) An action under subsection (1) is brought by the Crown in right of Ontario in its own right and not on the basis of a subrogated claim.

Action independent of recovery by others

(3) In an action under subsection (1), the Crown in right of Ontario may recover the cost of health care benefits whether or not there has been any recovery by other persons who have suffered damage caused or contributed to by the tobacco related wrong committed by the defendant.

Recovery for individuals or on aggregate basis

(4) In an action under subsection (1), the Crown in right of Ontario may recover the cost of health care benefits,

(a) for particular individual insured persons; or

(b) on an aggregate basis, for a population of insured persons as a result of exposure to a type of tobacco product.

Evidence and procedure in action brought on aggregate basis

(5) If the Crown in right of Ontario seeks in an action under subsection (1) to recover the cost of health care benefits on an aggregate basis, the following apply:

1. It is not necessary,

i. to identify particular individual insured persons,

ii. to prove the cause of tobacco related disease in any particular individual insured person, or

iii. to prove the cost of health care benefits for any particular individual insured person.

2. The health care records and documents of particular individual insured persons and the documents relating to the provision of health care benefits for 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.

3. A person is not compellable to answer questions with respect to the health of, or the provision of health care benefits for, particular individual insured persons.

4. Despite paragraphs 2 and 3, on motion by a defendant, the court may order discovery of a statistically meaningful sample of the documents referred to in paragraph 2 and the order shall include directions concerning the nature, level of detail and type of information to be disclosed.

5. If an order is made under paragraph 4,

i. the identity of particular individual insured persons shall not be disclosed, and

ii. all identifiers that disclose or may be used to trace the names or identities of any particular individual insured persons shall be deleted from any documents before the documents are disclosed.

Recovery of cost of health care benefits on aggregate basis

3. (1) In an action under subsection 2 (1) for the recovery of the cost of health care benefits on an aggregate basis, subsection (2) applies if the Crown in right of Ontario proves, on a balance of probabilities, that, in respect of a type of tobacco product,

(a) the defendant breached a common law, equitable or statutory duty or obligation owed to persons in Ontario 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 clause (a), the type of tobacco product, manufactured or promoted by the defendant, was offered for sale in Ontario.

Presumptions

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

(a) that the population of insured persons who were exposed to the type of tobacco product manufactured or promoted by the defendant would not have been exposed to the product but for the breach referred to in clause (1) (a); and

(b) the exposure described in clause (a) caused or contributed to disease or the risk of disease in a portion of the population described in clause (a).

Effect of presumptions

(3) If the presumptions under clauses (2) (a) and (b) apply,

(a) the court shall determine on an aggregate basis the cost of health care benefits provided after the date of the breach referred to in clause (1) (a) resulting from exposure to the type of tobacco product; and

(b) each defendant to which the presumptions apply is liable for the proportion of the aggregate cost referred to in clause (a) equal to its market share in the type of tobacco product.

Reduction or readjustment

(4) The amount of a defendant's liability assessed under clause (3) (b) may be reduced, or the proportions of liability assessed under clause (3) (b) readjusted among the defendants, to the extent that a defendant proves on a balance of probabilities that the breach referred to in clause (1) (a) did not cause or contribute to,

(a) the exposure referred to in clause (2) (a); or

(b) the disease or risk of disease referred to in clause (2) (b).

Joint and several liability in an action under s. 2 (1)

4. (1) Two or more defendants in an action under subsection 2 (1) are jointly and severally liable for the cost of health care benefits if,

(a) those defendants jointly breached a duty or obligation described in the definition of "tobacco related wrong" in subsection 1 (1); and

(b) as a consequence of the breach described in clause (a), at least one of those defendants is held liable in the action under subsection 2 (1) for the cost of those health care benefits.

Joint breach

(2) For purposes of an action under subsection 2 (1), two or more manufacturers, whether or not they are defendants in the action, are deemed to have jointly breached a duty or obligation described in the definition of "tobacco related wrong" in subsection 1 (1) if,

(a) one or more of those manufacturers are held to have breached the duty or obligation; and

(b) at common law, in equity or under an enactment, those manufacturers would be held,

(i) to have conspired or acted in concert with respect to the breach,

(ii) to have acted in a principal and agent relationship with each other with respect to the breach, or

(iii) to be jointly or vicariously liable for the breach if damages would have been awarded to a person who suffered as a consequence of the breach.

Population-based evidence to establish causation and quantify damages or cost

5. 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 a person in the person's own name or as a member of a class of persons under the Class Proceedings Act, 1992; or

(b) by the Crown in right of Ontario under subsection 2 (1).

Limitation periods

6. (1) No action that is commenced within two years after the coming into force of this section by,

(a) the Crown in right of Ontario;

(b) a person, on his or her own behalf or on behalf of a class of persons; or

for damages, or the cost of health care benefits, alleged to have been caused or contributed to by a tobacco related wrong, is barred under the Limitations Act, 2002 or any other Act.

Certain actions revived

(2) Any action described in subsection (1) for damages alleged to have been caused or contributed to by a tobacco related wrong is revived, if the action was dismissed before the coming into force of this section merely because it was held by a court to be barred or extinguished by the Limitations Act, 2002 or any other Act.

Apportioning liability

Scope

7. (1) This section applies to an action for damages, or the cost of health care benefits, alleged to have been caused or contributed to by a tobacco related wrong other than an action for the recovery of the cost of health care benefits on an aggregate basis.

Two or more defendants

(2) If a plaintiff is unable to establish which defendant caused or contributed to the exposure described in clause (b) and, as a result of a breach of a common law, equitable or statutory duty or obligation,

(a) one or more defendants 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 clause (a) and suffers disease as a result of the exposure,

the court may find each defendant 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.

Considerations

(3) The court may consider the following in apportioning liability under subsection (2),

(a) the length of time a defendant engaged in the conduct that caused or contributed to the risk of disease;

(b) the market share the defendant 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;

(d) the amount spent by a defendant on promoting the type of tobacco product that caused or contributed to the risk of disease;

(e) the degree to which a defendant 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 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 assumed a leadership role in manufacturing the type of tobacco product;

(h) the efforts a defendant 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 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 took to reduce the risk of disease to the public; and

(k) other considerations considered relevant by the court.

Apportionment of liability in tobacco related wrongs

8. (1) This section does not apply to a defendant in respect of whom the court has made a finding of liability under section 7.

Action or proceeding for contribution

(2) A defendant who is found liable for a tobacco related wrong may commence, against one or more of the defendants found liable for that wrong in the same action, an action or other proceeding for contribution toward payment of the damages or the cost of health care benefits caused or contributed to by that wrong.

Action or proceeding may be commenced even if damages or costs not paid

(3) Subsection (2) applies whether or not the defendant commencing an action or other proceeding under that subsection has paid all or any of the damages or the cost of health care benefits caused or contributed to by the tobacco related wrong.

Apportioning liability and contributions: factors

(4) In an action or other proceeding described in subsection (2), the court may apportion liability and order contribution among each of the defendants in accordance with the considerations listed in clauses 7 (3) (a) to (k).

Regulations

9. The Lieutenant Governor in Council may make regulations,

(a) prescribing a form of tobacco for the purposes of clause (i) of the definition of "type of tobacco product" in subsection 1 (1);

(b) respecting any matter necessary or advisable to carry out effectively the intent and purpose of this Act.

Retroactive effect

10. When brought into force under section 13, a provision of this Act has the retroactive effect necessary to give the provision full effect for all purposes including allowing an action to be brought under subsection 2 (1) arising from a tobacco related wrong, whenever the tobacco related wrong occurred.

Amendment

11. On the later of the day this section comes into force and the day section 1 of the Long-Term Care Homes Act, 2007 comes into force, the definition of "health care benefits" in subsection 1 (1) of this Act is amended by adding the following clause:

(g.1) payments under the Long-Term Care Homes Act, 2007,

Limitations Act, 2002

12. The Schedule to the Limitations Act, 2002 is amended by adding the following:

Tobacco Damages and Health Care Costs Recovery Act, 2009

subsection 6 (1)

Commencement

13. This Act comes into force on the day it receives Royal Assent.

Short title

14. The short title of this Act is the Tobacco Damages and Health Care Costs Recovery Act, 2009.

EXPLANATORY NOTE

This Explanatory Note was written as a reader's aid to Bill 155 and does not form part of the law. Bill 155 has been enacted as Chapter 13 of the Statutes of Ontario, 2009.

The Bill enacts the Tobacco Damages and Health Care Costs Recovery Act, 2009 and makes a complementary amendment to the Limitations Act, 2002.

The Act gives the Province a direct and distinct action against manufacturers of tobacco products to recover the cost of health care benefits caused or contributed to by a tobacco related wrong. The Crown may recover the cost of health care benefits with respect to particular individual insured persons or on an aggregate basis, with respect to a population of insured persons. The Act sets out particular rules where the Crown seeks to recover the cost of health care benefits on an aggregate basis and presumptions where the rules are satisfied. There are also provisions dealing with the joint and several liability of defendants.

Statistical information and information derived from epidemiological, sociological and other relevant studies is admissible as evidence for the purposes of establishing causation and quantifying damages in an action brought by a person in the person's own name or as a member of a class or by the Crown in an action it brings under the Act.

The Act also changes the rule with respect to limitation periods. It permits an action for damages or the cost of health care benefits, alleged to have been caused or contributed to by a tobacco related wrong that was committed at any time before subsection 6 (1) of the Act comes into force, to be commenced within two years after that subsection comes into force.

In an action that does not involve the recovery of the cost of health care benefits on an aggregate basis, the court may apportion liability of two or more defendants if certain criteria are met. The Act sets out factors for the court to consider in apportioning liability. Where there has not been an apportioning of liability, a defendant who has been found liable for a tobacco related wrong may commence an action against one or more of the other defendants found liable in the same action for contribution toward payment of the damages or the cost of health care benefits.

The complementary amendment to the Limitations Act, 2002 replaces the general limitation period rule with a special limitation period set out in the Tobacco Damages and Health Care Costs Recovery Act, 2009.

[39] Bill 155 Original (PDF)