Banks boycott tobacco shares

Investment banks HSBC and Dresdner Kleinwort Benson have issued memos to their fund managers instructing them not to buy any more shares of tobacco stock, in advance of this week's tobacco litigation hearing.

While Kleinworts warned against further investment in Imperial Tobacco, HSBC warned against further investment in Gallaher and Imperial - both defendants in a PI case brought by 53 cancer victims, represented by Leigh Day & Co.

Fear of plummeting tobacco shares means City eyes will be trained on the High Court this week, where Mr Justice Wright is due to hear limitation issues and determine whether any out of 36 of the cancer victims ought to be time-barred.

The Lawyer also understands several investment banks and financial institutions have anonymously hired lawyers to attend the 10-day hearing and brief them of events which could affect share prices.

Leigh Day & Co senior partner Martyn Day, said: "The judge will look at whether nicotine is addictive and tar caused the cancer of the plaintiffs."

Day, due to take the witness stand himself on Monday, continued: "This is the first time a judge in the UK will deal with these issues."

Kleinworts' memo advised: "Special consideration will be given to any comments made by the judge over the merits of the underlying litigation."

Judgment on the limitation issues is expected in the New Year, and Judge Wright will hear the litigation itself in January 2000.