Suing big tobacco for the costs of smoking-related illnesses is on the radar of an organisation set up by billionaire iron ore magnate and philanthropist Andrew "Twiggy" Forrest.

The $75-million Eliminate Cancer Initiative (ECI), funded by Mr Forrest and wife Nicola, is seeking legal advice on the potential to mount a case seeking billions of dollars in compensation from tobacco companies.

ECI said the potential litigation would likely be based on a landmark Canadian lawsuit where three tobacco companies were ordered to pay more than $15.6 billion in damages to smokers in Quebec.

"What we do need to keep in mind is the impact and cost associated with those smokers who are now coming through the healthcare system," ECI chief operating officer Bruce Mansfield said.

"We do need to recognise that there is a cost associated with tobacco and therefore an approach that needs to be considered very sensibly is for those industries to actually take some of the burden away from the community and of course the government."

Mr Forrest said to tackle cancer, smoking must also be tackled because it was the single-greatest cause of preventable death.

"Cancer is the greatest cause of disease burden in Australia and, personally, it has caused the misery of every single generation of Forrests since the premature death of Lord John Forrest in 1918," Mr Forrest said.

"One hundred million lives will be lost in the next decade — one in six deaths and with a rising incidence by 70 per cent in the next two decades.

"We must erupt change and bring this devastating disease to its knees."

Three tobacco companies have been ordered to pay $15.6 billion to smokers in a landmark Canadian lawsuit. ( Flickr: Greg Jordan )

The potential litigation would be part of a multi-pronged "assault" on the tobacco industry that is also seeking to have major financial institutions cut tobacco companies from their investment portfolios, Mr Forrest's Minderoo Foundation said.

The Australian Council on Smoking and Health has welcomed the move to put the burden of health costs back on the tobacco industry.

"The biggest impact of a successful legal action would be to hasten the demise of the tobacco industry in Australia," president Maurice Swanson said.

"We're aiming for a smoke-free Australia by 2025 and this sort of action by Andrew Forrest would put another nail in the coffin of the tobacco industry."

"We all know that tobacco is expensive in Australia and that's because we have relatively high taxes and they have been successful at reducing the number of smokers in Australia but those taxes are paid by individual smokers.

"The most compelling reason we're calling for this sort of action is that taxpayers are the group that picks up the tab for the treatment of smoking caused diseases.

"The tobacco industry itself, the most lethal industry in the world, contributes nothing to compensate governments for the healthcare costs that are incurred by the consumption of their lethal product."

'We must hold them to account'

Cancer Council chief executive Sanchia Aranda also applauded the move and explained most governments do not have the finances to go head to head with big tobacco.

"Most countries haven't gone down this way because the tobacco industry has very deep pockets," Professor Aranda said.

"The tobacco industry has been negligent in its duty to governments and individuals who contract smoking-related illness and we must hold them to account for continuing to market and sell this product.

"The tobacco industry has known for over 50 years that its product kills and yet they continue to manufacture and promote this product and market it to unsuspecting young people worldwide."

Legal action poised to be announced within days

More than 15,000 Australians are diagnosed with preventable cancers caused by tobacco each year and 12.2 per cent of the population currently smoke.

Professor Aranda has commended the Federal Government for policy measures taken to decrease smoking rates, including tobacco taxes and the introduction of graphic warnings on packaging, but said they do not work for everybody.

"There's certainly the belief that since graphic warnings and plain packaging that Australians should be well aware of the dangers of smoking but the problem is that tobacco smoke or the nicotine within that is highly addictive and it takes a very short time to become addicted to cigarettes," Professor Aranda said.

"The reality is that many people are already a long way down the path of addiction before they take heed of the warnings.

"Even people who've given up some years ago in the older generations are facing tobacco-related illnesses — not only cancers but respiratory disease, vascular disease, heart disease — so we see this as the biggest burden of healthcare costs in Australia for the foreseeable future," she said.

ECI said this concern was why part of their efforts would also look at lobbying for further policy changes such as raising the minimum age to purchase tobacco.

The organisation is expected to make an announcement regarding the potential challenge to the tobacco industry in the coming days.