U.K. Tobacco Lawsuit's Collapse May Send Litigation Up in Smoke()

[Robert Weissman <rob@essential.org>]

U.K. Tobacco Lawsuit's Collapse May Send Litigation Up in Smoke
by ERNEST BECK
The Wall Street Journal Interactive Edition (1005) 
Date: Monday, 3/1/99

LONDON -- The collapse last week of Britain's first class-action lawsuit
against the tobacco industry is a major setback for antismoking forces in
the country, and is likely to discourage further legal action across
Europe against Big Tobacco. 

That's the pessimistic view of analysts and antitobacco pressure groups
following the decision by a majority of 53 lung-cancer patients to abandon
their case against United Kingdom tobacco giants Gallaher Group PLC and
Imperial Tobacco PLC, on the advice of their lawyers. The class-action
lawsuit, known as a group-action suit in Britain, was the first of its
kind in Europe and was being closely watched as a test of strength between
Europe's growing antismoking lobby and cigarette manufacturers. 

"It's a severe blow to our hopes, and doesn't bode well for anyone else
taking on the industry," said Amanda Sandford, a spokeswoman for Action on
Smoking and Health, or ASH, the antitobacco lobby group, in London. 

After six years of pretrial preparation, the case faltered when 46 of 53
plaintiffs said they would give up, and the judge then dismissed the case. 

The seven remaining plaintiffs are also expected to quit. 

'The Chances Were Pretty Slim'

A trial date had been set for January 2000. But the plaintiffs were urged
to drop the action by their lawyers after a High Court judge, Michael
Wright, ruled last month that most of the plaintiffs were barred from
suing because their claims were filed too late. There is a three-year
statute of limitations for filing personal-injury claims. 

Further, in a preliminary review of the issues and evidence, the judge
also cast doubt on the merit of the claims, which focused on accusations
that Gallaher and Imperial negligently refused to reduce tar levels in
cigarettes and to beef up warning labels. The judge described the claims
as "speculative," and said they weren't strong enough to warrant bypassing
the statute of limitations. 

Martyn Day, a lawyer for the plaintiffs, whose London firm, Leigh, Day &
Co. had taken the case on a no-win, no-fee basis, said he had to balance
the judge's negative comments with his firm's limited financial resources
to pursue the litigation. 

"The judge was fundamentally unimpressed with our case, so the chances
were pretty slim for success," explained Mr. Day, who had been coached by
U.S. tobacco-litigation experts. Mr. Day said his firm had already spent
around 2.5 million pounds ($4 million) to prepare the case. 

Personal Responsibility

While this was the first serious attempt to take on the U.K. tobacco
giants, and was regarded as a bellwether case for Europe, it was always a
longshot. Class-action suits are new to Britain and Europe, as are no-win,
no-fee arrangements. Further, most cases in the U.K. are tried before
judges, not juries, which are sometimes more sympathetic to plaintiffs.
And personal-liability awards are usually puny compared with those in the
U.S.: Mr. Day was asking for 50,000 pounds in damages for each plaintiff. 

More importantly, though, there's a widespread belief in the U.K. and
Europe that smoking is a matter of personal choice and responsibility,
unlike in the U.S., where antitobacco forces have won big compensation
claims against cigarette manufacturers. Recently, a lung-cancer patient in
the U.S. won $50 million in a suit against Philip Morris Cos., the maker
of Marlboro cigarettes. 

What's more, most European governments don't back all measures against the
industry. In the U.K., for example, while the Blair government supports a
new, all-encompassing European Union ban on tobacco advertising and
sponsorship, earlier this year it warned the country's National Health
Service not to begin legal proceedings against tobacco companies to
recover costs for treating sick smokers. 

"The outcome of this case is a recognition that nobody smokes without
being aware of the risks, and that smokers make informed, adult choices
for themselves," said Ian Birks, a spokesman for Gallaher, which together
with Imperial controls 80% of the U.K. cigarette market. The tobacco
companies had vehemently denied allegations by plaintiffs that they knew
by the 1950s that their products were lethal, but didn't inform consumers.
Warning labels were added to cigarette packs in Britain in 1971. 

Few Pending Cases

Mr. Birks said Gallaher spent "millions" of pounds to defend the case;
Imperial said its legal costs reached 7 million pounds. On Friday,
Gallaher shares rose 17.50 pence each, or 4.2%, to 437.50 pence; Imperial
was up four pence to 731 pence on the London Stock Exchange. 

Across Europe, there are only a few cases pending -- in France, Italy,
Scotland and Ireland -- against tobacco companies. However, these are
brought by individuals, who don't have the financial means to pursue
lengthy and expensive legal action against big tobacco companies. Tony
Silverman, an analyst at BT. Alex Brown in London, said there is now no
litigation threat in Europe against cigarette companies. "Little people
can't sue big people," concluded Mr. Silverman about the case. 

The European antismoking lobby has also lost its most experienced
tobacco-litigation lawyer and legal team: Mr. Day and his firm. As part of
a deal to waive court costs, which the plaintiffs were ordered to pay, Mr. 

Day and his firm agreed not to take part or assist in any legal
proceedings against Imperial and Gallaher in the U.K. and Ireland for 10
years, and for five years against any tobacco company in those countries.
The plaintiffs also agreed not to bring further smoking-related claims.
------------------------------------------------------ 8:58 AM on 3/1/99