Imperial Tobacco: the 10% tripwire comes out

For a year, the company paid to process the claims of Canadian smokers and their estates worked under an automatic brake. Before its costs could run more than 10% past the first annual global claims administration costs budget, Epiq Class Action Services Canada Inc. had to stop and seek approval; the limit, as Justice Jessica Kimmel described it, "is an automatic trigger that prevents further cost overrun. It governs the current period, not the upcoming period." On September 9, 2026, with Justice Piché of the Quebec Superior Court present as an observer, Justice Kimmel granted the orders that take it out, and on September 11 she released her reasons, per the Endorsement of Justice Kimmel, Sept. 11, 2026, paras. 19, 24–25, 28.

When the motion was argued, the Attorney General of Quebec had set Epiq's first three-month budget, $19,958,210, against a framework that projected $33,494,485 for the whole of year two, called the result a variance of about 138%, and asked that the limit stay and the budget wait until Epiq disclosed what it had actually spent, per the Aide Memoire of the Attorney General of Quebec, Sept. 4, 2026, paras. 17–18. The Quebec class plaintiffs answered that the framework had never been a budget. The three plan administrators backed the amendment.

What the orders now require

The amended and restated orders do four things, in the endorsement's summary. Epiq files claims administration budgets every three months instead of every twelve, and each needs the court's approval in advance. With budgets that frequent and a shorter forecasting window, the 10% cost variance limit is removed. Epiq keeps delivering weekly claims administration reports for the life of the administration. And Epiq is authorized to decide how common costs — work that serves more than one of its roles — are allocated among them, per the Endorsement of Justice Kimmel, Sept. 11, 2026, para. 2. The weekly and monthly reports go to the stakeholders and are not filed with the CCAA court.

The calendar is in the order itself. Within forty-five calendar days of September 9, Epiq must put the first quarterly budget, for September 1 to November 30, 2026, before the Ontario court and the Quebec Superior Court for joint approval. Every later quarterly budget goes to the plan administrators thirty days before its quarter starts and to both courts fifteen days before, with the approval motion to be scheduled no later than the first day of the quarter, subject to the courts' availability. Once Epiq delivers its exit report under the Quebec administration plan, the Quebec court drops out of the cycle, per the Amended and Restated Claims Administrator Order, Sept. 9, 2026, paras. 16–18.

Who objected

The endorsement records one objector with a supporter. "Only the Attorney General of Quebec (in this respect, supported by the Tobacco Companies) objected or raised concerns about one aspect of the relief" — the variance limit. Everything else was unopposed or supported, including by the Quebec class plaintiffs, per the Endorsement of Justice Kimmel, Sept. 11, 2026, paras. 3, 16. No filing by the tobacco companies appears on the dockets for this motion; the endorsement is where their position is recorded.

Quebec made two points. The court should know actual costs to date before deciding, "particularly in circumstances where it appears that the projected costs have been exceeded in the first year of administration"; and Epiq should still answer to a 10% limit, measured against the quarterly budgets "or at least against an annual budget." The limit, Quebec argued, is "an automatic, real-time safeguard that acts as a check on administration costs, which already appear to be significantly higher than the original projections," per the Endorsement of Justice Kimmel, Sept. 11, 2026, paras. 16–17.

The denominator

Justice Kimmel began with what the August 2025 order had approved. It was a Global Claims Administration Costs Framework, and the framework "was not an approved budget"; as the class plaintiffs had pointed out, it left out third-party costs such as Epiq's legal fees and sales taxes, and "was intended to be a rough estimate and to provide a template for the types of information that would ultimately be included in the annual budgets to be approved by the two Courts." Then: "The AG Quebec incorrectly conflates the Framework with a Court-approved annual budget and then tries to suggest that the non-existent budget was exceeded," per the Endorsement of Justice Kimmel, Sept. 11, 2026, para. 18.

That last sentence appears, with "Quebec" in place of "The AG Quebec," as paragraph 5 of the class plaintiffs' aide memoire filed the day before the hearing, per the Aide Memoire of the Quebec Class Action Plaintiffs, Sept. 8, 2026, paras. 4–5. The endorsement does not discuss the 138% calculation.