Staring down the barrel of a smoking gun

Late last year, Leigh Day & Co announced its intention to represent a number of former smokers suffering from lung cancer in proceedings against the UK's two main tobacco companies, Imperial Tobacco and Gallahers. Proceedings have now commenced on behalf of 36 claimants, and it is understood that many more may become involved as the litigation progresses. A number of firms from around the country will assist Leigh Day in handling the proceedings.

The launch of the case coincides with the emergence of unprecedented doubts concerning the tobacco industry's previously unblemished record in this type of litigation. Until recently, cigarette companies have not had to pay a penny to alleged smoking victims. By using their massive financial resources to fund their defence, they have out-spent and out-manned their opponents, who have never been able to secure legal aid. There have also been allegations of delaying tactics and dirty tricks and, in the US, accusations of jury vetting – even jury rigging – have been widespread.

The tobacco industry's successful claims record is not due solely to superior tactics and money. Cigarette companies have always managed to persuade courts that smoking is entirely a matter of choice. In addition, the companies, without ever conceding to any extent that cigarettes are harmful, have nevertheless also benefited from the universal acceptance that they are. Cigarette packets have had health warnings printed on them in the UK since the industry voluntarily introduced them in 1971.

The litigation against Imperial Tobacco and Gallaher, could cost the plaintiffs' lawyers around £3m if it fails, because it is funded on a conditional fee basis. So, given the tobacco industry's previously unassailable position, what explanation is there for the timing of these latest proceedings?

The reasons for the current optimism on the part of smokers and the lawyers litigating on their behalf are twofold. First, the reforms put forward by Lord Woolf and other changes in civil procedure in this country will make it far more difficult in future for defendants to control the pace of the litigation. Delays in the past have left plaintiffs out of pockets and unable to continue with their claims, but the proposal that judges will take an active case management role should ensure that the cases come to trial more speedily.

Second, the industry is now more vulnerable to claims. The turning point may well have been the US Supreme Court's landmark decision in Cipollone v Liggett Group Inc in June 1992. In this case, the claimant, Rose Cipollone, began smoking at the age of 16 in 1942. She was diagnosed as suffering from lung cancer in 1981, and died in 1984. A year before her death, she brought an action against Liggett, the fifth biggest cigarette manufacturer in the US and the manufacturer of the cigarettes she had smoked. The action was continued on behalf of her estate after her death.

By the time this case was heard, the tobacco industry's traditional defence, which relies on a smoker's freedom of choice and knowledge of the risks, was no longer thought entirely foolproof. Liggett, therefore, also contended that the effect of legislation introduced in the US on 1 January 1966, requiring cigarette packets to bear a warning that smoking may be harmful, and also restricting certain tobacco industry advertising practices, barred claims of this type from that date.

The jury found that Liggett had been in breach of its duty to warn and had breached its express warranties regarding the health risks presented by its products for the period prior to 1966. The jury also upheld Liggett's contention regarding the effect of the 1965 legislation, and decided that this did pre-empt the claim to the extent that it was based on Liggett's advertising, promotional and public relations activities.

The decision in Cipollone opened the door for further attacks on the tobacco industry. It was followed by the revelations of a number of tobacco industry insiders in the US, which further eroded the industry's former aura of invincibility.

In May 1994, the University of California, in San Francisco, received copies of more than 4,000 confidential documents belonging to the tobacco giant Brown & Williamson (a subsidiary of the British company BAT Industries), which purportedly reveal what one prominent anti-smoking lobbyist calls a “40-year campaign of concealment and misinformation on the part of the tobacco industry in respect of what the industry really knew regarding the dangers of smoking”.

The documents were removed over a four-year period from a Kentucky law firm, which represented Brown & Williamson, by law clerk Merrell Williams. They reportedly deal with the tobacco controversy from the industry's perspective and are said to contain two key revelations:

Secret and very sophisticated research carried out on behalf of Brown & Williamson has confirmed nicotine to be an addictive substance, a fact which the industry has always denied vehemently. It is said that the documents show that the industry knew nicotine was addictive in the early 1960s.

The results of this and other extensive scientific research carried out on behalf of tobacco companies has been suppressed.

There have also been other whistleblowers who have ventured into the limelight to jeopardise the tobacco industry's position. In particular, Victor de Noble, a former research scientist for tobacco giant Philip Morris, has described how the results of his research, which he says scientifically proved that nicotine was addictive and included the discovery of a “safe” substitute for nicotine, were deliberately stifled. De Noble also claims that his research programme was discontinued because his work inevitably suggested that cigarettes containing nicotine were unsafe and unhealthy.

These exposes have led to greater adverse publicity for the cigarette companies and the threat of increased legislative control.

At the same time, 22 US states, led by Mississippi, commenced proceedings against cigarette companies to recoup the vast sums expended by them in providing medical treatment for poor smokers. In response, and in a development that would previously have been unthinkable, the Liggett Group issued a statement in which it formally admitted that cigarettes are addictive and harmful.

Liggett agreed to an initial settlement of $25m and also pledged to pay one quarter of its pre-tax profits for the next 25 years to the states involved in the litigation. It also agreed to provide documents and to allow its employees to testify in order to assist the states in their claims against other tobacco companies. Meanwhile, the other US tobacco giants are now reported to be negotiating a $300bn deal that will also secure them immunity from future claims.

Taking account of all the recent developments, the proceedings against Imperial Tobacco and Gallaher appear to have more chance of success than similar litigation in the past. The plaintiffs will claim that the cigarette companies have not taken sufficient care in order to minimise tar levels in their cigarettes.

Provided that it can be established that UK tobacco manufacturers had (or ought to have had) the same level of knowledge as their US counterparts, then a failure to keep levels of nicotine in cigarettes to a minimum, replace nicotine with a less harmful substitute, and reduce levels of tar in cigarettes will not only leave the companies open to findings of negligence, but should also negate any defence based on the claimant having consented to the consequences by choosing to smoke.

Leaving aside de-baring and time limitation arguments, it is difficult to see how claims in negligence arising from the time when cigarette packets and advertisements did not have health warnings on them can be resisted if the allegations made by Williams, De Noble and the others are sustained. In the celebrated case of Donoghue v Stevenson, from 1932, it was decided that a manufacturer was negligent in allowing the decomposed remains of a snail to be present in a bottle of ginger beer. It would seem to follow that the presence of harmful chemicals in cigarettes could amount to a comparable breach of duty on the part of the tobacco companies.

There would also appear to be prospects of arguing that since 1988 the defendants have supplied a “defective product” contrary to the provisions of the Consumer Protection Act 1987.

However, the greatest bar to a successful claim against a cigarette manufacturer is, perversely, one of public policy. In the event that the court was to find against a cigarette manufacturer, the flood gates would be expected to open, and the tobacco industry might soon be faced with more claims than it could possibly meet, almost certainly leading it into bankruptcy. After that, claims against cigarette suppliers, wholesalers and retailers could follow, and they could end up in a similar predicament to the manufacturers. Ultimately, the industry might be forced into an expensive truce with litigants and potential claimants.

In the event of a court judgment against a cigarette manufacturer on the basis of a failure to make cigarettes as safe as they could, or of a failure to warn of the adverse health consequences, the manufacturers of other products could also anticipate claims from those who have suffered as a result of consuming their products, particularly if these products do not attract specific health warnings.

For example, breweries and other alcohol manufacturers could have difficulty defending claims from those suffering from cirrhosis of the liver or other conditions caused by alcohol on the basis that they could have, but failed to, produce low alcohol beer, wines and spirits. As a result, a great number of people (and not only the lawyers) will await the outcome of the proceedings against Imperial Tobacco and Gallahers with a good deal of interest and, in many cases, trepidation.