ATLA president slams tobacco companies' 'pittance' payout

IN a scathing attack against the US tobacco industry settlement, the president of the American Trial Lawyer's Association (ATLA) has condemned the $360bn payout as a “pittance” and the agreement as a “sweet deal” for the companies involved.

The historic deal was struck on 20 June between Philip Morris, RJ Reynolds and British American Tobacco (BAT) and the attorney generals of US states, led by Michael Moore, the attorney general of Mississippi.

If ratified by the US Congress, the deal will stop tobacco advertising, remove cigarette vending machines from places accessible to children, and give the US Food and Drug Administration control over the nicotine content in cigarettes.

The tobacco companies will also pay $60bn punitive damages and $300bn over a 25-year period to settle suits and fund anti-smoking campaigns.

In return, the tobacco companies are granted immunity now and in the future against all class-action lawsuits and individual lawsuits claiming punitive damages.

But president of the ATLA Howard Twiggs, who was in Amsterdam attending the launch of a new European-wide Personal Injury Group (see back page) when the deal was announced, said: “I don't dispute that the lawyers have done a wonderful job representing their clients but this is a bad deal for American consumers and the public, and a sad day for American justice.

“I say nuts to this settlement. Tobacco has killed 450,000 people a year in America and will continue to do so for the next 25 years while these companies are paying up.”

He said that a result which would bankrupt the tobacco companies was needed, not a settlement that was likely to boost the value of tobacco company stock, which was previously undervalued because of fear of litigation.

In January the ATLA's board of governors passed a resolution outlining specific criteria in the settlement which would lead the association to opposing it. These included a settlement which would immunise the tobacco industry against future claims and which would restrict future trials by jury.

However, Martin Day, managing partner of Leigh Day & Co, the firm which is representing claimants in proceedings against UK tobacco companies Imperial Tobacco and Gallahers, welcomed the deal.

He said: “It is a fantastic settlement, which has a group of companies paying massively more than has been seen in any other part of the world, and which will have international repercussions, encouraging litigation throughout the world.”