Australian States Weigh $50bn Lawsuit Against Big Tobacco

Australian state governments could sue British American Tobacco, Philip Morris and Imperial Brands for up to $50bn in publicly funded healthcare costs under a legal blueprint now under formal review in South Australia. The proposal, authored by Neil Francey, a Sydney Health Law research affiliate, argues the states could file Federal Court proceedings seeking compensation for hospital costs incurred since 2000, plus funding for cancer screening and prevention programs.

Francey will present the plan at the Clinical Oncology Society of Australia's annual scientific meeting in Sydney on Thursday. He has briefed state government MPs. Under the scheme, the six state governments would pool resources into a dedicated joint legal taskforce to run the case.

"For decades, the tobacco industry has unjustly enriched itself while distracting and confusing smokers about the harms and addictiveness of their product," the proposal states. "The industry has not been forced to bear the full costs of the harm caused by their product. These costs have either been borne by smokers themselves, or by taxpayers when smokers get sick and receive publicly funded or subsidised health care."

A BAT Australia spokesperson said the company does not comment on potential or pending legal claims. Philip Morris and Imperial Brands did not respond to requests for comment.

Why 2000 is the starting line?

The claim would recover costs dating to 2000, when internal tobacco industry documents were published showing the industry knew smoking caused serious disease but colluded to obscure the evidence. "I think you can justify a figure in the order of fifty billion, possibly even more," Francey said. That sum works out to roughly $2bn per year across the 25-year window — a number a court has yet to test.

The proposal excludes the Northern Territory and the ACT because the territories are an arm of the commonwealth, and differing healthcare funding arrangements could complicate the case, Francey said.

What legal footing does the case rest on?

Francey is no stranger to tobacco litigation. In 1991 he represented consumers in a Federal Court case triggered by a Tobacco Institute of Australia advertisement claiming there was "nothing which proves scientifically that cigarette smoke causes disease in nonsmokers". The court found compelling scientific proof that passive smoking causes lung disease in non-smokers, making the industry's claims unlawful and accelerating indoor smoking bans.

The new proposal leans on consumer protection law rather than personal injury claims. Francey said this structure bypasses the hurdles facing individual smokers — proving which brand caused the harm, and rebutting industry arguments about "freedom of choice". States, he said, could seek court orders against companies whose misleading and deceptive conduct caused loss and damage, plus the likelihood of future suffering.

The industry, for now, says nothing of substance. Its silence on the merits leaves the legal argument uncontested only in public, not in court.

Which states are actually interested?

South Australia is furthest along. Health minister Blair Boyer said there was a "substantial" public interest in reducing the harms tobacco-related diseases place on governments and health systems. "While this proposal draws on historic findings regarding misleading and deceptive conduct by the tobacco industry, it is important that the state does its own due diligence," he said. "I have sought advice on the proposal, the likelihood of success and the benefits to South Australians, which will allow the government to consider its options."

A spokesperson for NSW health minister Ryan Park said: "We will review his proposal carefully". A spokesperson for Queensland health minister Tim Nicholls confirmed a meeting with Francey but said the state was focused on the illicit tobacco and vape trade. Western Australia's health minister, Meredith Hammat, said her state's efforts target stronger tobacco legislation and enforcement.

Three states are reviewing; none has committed. The gap between interest and litigation is where this proposal currently lives.

Have other countries done this?

The blueprint follows overseas precedent. The 1998 Master Settlement Agreement saw major US tobacco companies sign a deal with state attorneys general, settling dozens of lawsuits seeking billions in smoking-related healthcare costs. In 2025, three of the largest tobacco companies were ordered to pay billions in compensation for smoking-related harms in Canada — though health groups expressed disappointment that the decision did not cover harms from future use.

Laura Hunter, CEO of the Australian Council on Smoking and Health, said it would be "entirely reasonable for tobacco companies to bear the costs of the harm their products have caused" in Australia. "For years, they've made money selling products that addict people and cause serious illness and death," she said. "The responsibility for addressing that harm belongs with the companies that profited from it."

What could derail it?

Legal experts urge caution. Becky Freeman, professor of tobacco control at the University of Sydney, noted the Canadian case dragged on for years and said any country taking on tobacco companies needed to be on "solid ground" to avoid spiralling costs and weak outcomes. "I am absolutely supportive of the tobacco industry being held accountable," she said. "I would want to ensure any action was comprehensive."

Associate Prof Jonathan Liberman, a University of Melbourne expert in law and global health with more than two decades in tobacco control litigation, said features of the US legal system make large-scale suits easier there. Success in Australia, he argued, would require specific enabling legislation and well-resourced private law firms doing the bulk of the work outside government. "Without these, lawsuits risk consuming significant time and public resources that may be better directed toward direct policy reform, and ultimately falling over on a combination of procedural grounds and resources running out."

That caveat sits at the heart of the states' decision: a $50bn promise on paper, contingent on legislation that does not yet exist and a taskforce no government has yet funded.