Australian states weigh proposal to recover billions in tobacco health costs

Australian states could pursue tobacco companies for billions of dollars in healthcare costs under a legal proposal being considered by governments. South Australia has formally requested advice on the plan, which argues that states could seek up to $50bn through the federal court to recover health spending and support cancer screening and prevention.

The blueprint was developed by Neil Francey, a former barrister and Sydney Health Law research affiliate. It targets British American Tobacco, Philip Morris and Imperial Brands, along with their overseas parent corporations, over alleged decades of misleading and deceptive conduct under Australian consumer law. Francey is presenting it at the Clinical Oncology Society of Australia’s annual scientific meeting in Sydney on Thursday, November 12.

Francey proposes that the six states combine resources in a joint legal taskforce. His plan excludes the Northern Territory and ACT because their relationship with the commonwealth and differences in healthcare funding could complicate proceedings. The proposed claim covers state healthcare costs since 2000, when published internal industry documents revealed that tobacco companies knew smoking caused serious diseases but had worked together to conceal and obscure the evidence.

Francey argues that government action under consumer protection laws could overcome some obstacles encountered in smokers’ personal injury cases, including establishing which brand caused an illness and industry arguments about individual choice. In 1991, he represented consumers in a federal court case challenging a Tobacco Institute of Australia advertisement about passive smoking. The court found compelling scientific evidence that secondhand smoke caused lung disease and respiratory conditions in non-smokers, ruling the industry’s claims unlawful. The decision helped accelerate indoor smoking bans.

South Australian health minister Blair Boyer said reducing the burden of tobacco-related disease was a substantial public interest, but the government needed to conduct its own assessment. He has requested advice on the proposal’s prospects and potential benefits. A spokesperson for NSW health minister Ryan Park said the plan would be reviewed carefully. Queensland confirmed a meeting with Francey while emphasising its focus on illicit tobacco and vape laws. Western Australia said its current priorities were stronger tobacco legislation and enforcement.

A BAT Australia spokesperson declined to discuss potential or pending legal claims. Philip Morris and Imperial Brands did not respond to requests for comment. Laura Hunter, chief executive of the Australian Council on Smoking & Health, supported making tobacco companies pay for harm caused by their products, arguing that responsibility should rest with the businesses that profited.

The proposal follows major overseas litigation. In the United States, tobacco companies and state attorneys general signed the 1998 Master Settlement Agreement to resolve dozens of lawsuits seeking smoking-related healthcare costs. In Canada, three major tobacco companies were ordered in 2025 to pay billions for smoking-related harms, although health groups criticised the failure to address harm from future use.

University of Sydney tobacco control professor Becky Freeman supported holding the industry accountable but cautioned that the Canadian proceedings had taken many years. She said governments needed a comprehensive approach and a firm foundation to avoid escalating costs and disappointing results.

University of Melbourne law and global health expert Jonathan Liberman said successful Australian litigation would require specific enabling legislation and substantial legal work by well-resourced firms outside government. He warned that, without those supports, proceedings could exhaust public resources and fail through procedural obstacles or funding shortages, diverting resources from direct policy reform.