EDITORIAL: The cost of corporate negligence

Big Tobacco’s $24bn settlement in Canada is the latest important moment in the global battle against corporate negligence. This hefty payout, stemming from a 2015 Quebec court decision upheld in 2019, underscores the financial and reputational risks companies face when they fail to warn consumers about product dangers.

The settlement’s global implications are profound. It echoes the historic Engle verdict in the US in 2000 when the jury initially awarded $145bn to Florida smokers before the class action was decertified. These cases highlight a rightly growing trend: courts are willing to hold companies accountable for health-related damages. 

Big Pharma, Big Tech, alcohol and processed food manufacturers take note: the era of downplaying the health risks is over.

For investors, this is a stark reminder of the importance of due diligence. Companies that prioritise consumer safety and transparency do well operationally and on the stock market. For instance, AVI’s share price has increased more than fourfold in the past five years, compared with its closest rival, Tiger Brands — the stock of which gained less than half that. The reason? Tiger Brands is in the throes of a reputation-sapping listeria scandal, which led to fatalities and triggered a class-action lawsuit. 

As we move forward, let this be a reminder that justice, though delayed, is never denied. The world is watching, and the era of unchecked corporate power is coming to an end.