UK:British gov't stubs out tobacco litigation threat (fwd)

[Robert Weissman <rob@essential.org>]

British gov't stubs out tobacco litigation threat
by Edna Fernandes
Reuters (1583) 
Date: Monday, 2/15/99

LONDON (Reuters) - The British government Monday moved to stub out plans
by the National Health Service (NHS) to sue the tobacco industry, warning
action by health authorities to recover smoking-related medical costs
would be illegal. 

The news came hours after the NHS Confederation trade group said it was
considering suing the tobacco industry to recoup the estimated 1.7 billion
pounds ($2.77 billion) annual cost of treating smoking-related illnesses. 

The Department of Health said moves by an NHS trust or health authority to
sue the tobacco industry would be illegal under existing law and would
need new legislation to proceed. 

``NHS trusts and health authorities cannot sue tobacco firms,'' a
government spokeswoman said. 

``They would require primary legislation to enable them to bring legal
proceedings and there are certainly no plans to change the law (to allow
this).''

The government official said moves to take legal action would be ``ultra
vires,'' or beyond the powers of the NHS. NHS litigation to recoup costs
of treatment is banned under the 1977 NHS Act, unless special primary
legislation is enacted. 

The NHS Confederation was not available for an immediate response. But
earlier Monday, health industry managers said they were considering taking
legal action with the hope of launching initial legal consultation by
mid-May. 

``We decided the issue of litigation needed to be resolved,'' an NHS
Confederation spokeswoman said earlier. 

The NHS Confederation initiative followed agreement by the U.S. tobacco
industry to pay $206 billion over 25 years to settle lawsuits brought by
40 states to cover the medical costs of smokers. 

``The overall (annual) cost of the NHS treating smoking-related illnesses
is some 1.7 billion pounds ($2.77 billion),'' an NHS Confederation
document said. 

The Confederation said if legal action went ahead it could claim for costs
incurred over the last six years, totaling more than 10 billion pounds
($16.3 billion). 

British tobacco firms Gallaher and Imperial Tobacco, which supply nearly
80 percent of cigarettes sold in Britain, already face claims from 53
people who allege the companies negligently failed to reduce tar levels in
their cigarettes. 

That private court action now looks set to be delayed after plaintiffs
called for an adjournment earlier Monday -- seen by some as a possible
move toward settlement. 

Tobacco industry analysts said the government's announcement on the NHS
litigation plan should kill off the threat of new public-led action. 

``This sounds like extremely good news for the tobacco companies,'' said
Nyren Scott-Malden, analyst at Dresdner Kleinwort Benson who suggested the
government may have been swayed by fat tax receipts from the industry. 

``The tax burden is the big difference between here and the U.S. The UK
government already gets a huge amount out of smokers. Revenue from tobacco
is of the order of 10 or 11 billion pounds a year, which is more than a
quarter of the total cost of the NHS.''