[Intl-tobacco] BAT fears over Australian court case

[Robert Weissman]

BAT fears over Australian court case
Source: CityWire, 2002-04-03, via tobacco.org
URL: http://www.citywire.co.uk/print/default.asp?vid=43172&fst=

British American Tobacco plans to appeal against a landmark legal
judgement in Australia which threatens to expose the firm to another
wave of claims from cancer victims, writes Meera Selva.

In a highly unusual move the Melbourne Supreme Court last week
ordered a case brought against BAT by a 51-year old woman cancer
sufferer to go straight to the assessment of damages.

The surprise decision by the court not to allow BAT to defend itself
against charges that it was negligent in selling Rolah Ann McCabe, a
grandmother, cigarettes that are cancer causing and addictive has
sent shockwaves through the Australian tobacco industry.

The case has proved highly controversial in Australia as Supreme
court judge Geoffrey Eames gagged the Australian media from
disclosing why the case was not argued out in court.

A spokeswoman for BAT told Citywire that the company will appeal
against the case once the court decides on the damages.

She said: 'We do not agree with what the judge said and all the
issues in the case are subject to appeal.'

The court is due to appoint a jury tomorrow to decide the level of
damages.

Brokers in this country are concerned at the impact of the case. One
firm today advised investors to take profits in BAT after a strong
run in the shares this year. BAT shares (BATS) have fallen 5p to
659p today.

One analyst, who did not want to be named, told Citywire: 'We are
following the case, and we do believe it to be significant, but the
size of the damages have not yet been decided and that will be a
crucial factor in how serious this matter is.'

McCabe began to smoke Capstan cigarettes when she was 12, and said
she continued to smoke BAT brands for 30 years. In her lawsuit, she
claims BAT deliberately encouraged children and teenagers to smoke.
She alleges that between 1950 and 1992 British American Tobacco
knew, or ought to have known the risk of lung cancer and that
nicotine was addictive.

BAT, which traded in Australia as WD and HO Wills until it merged
with Rothmans in 1999, is the second largest players in Australia's
cigarette market. Australians smoke 25 billion cigarettes a year,
and BAT controls around 30% of the total market share.

News of BAT's setback in Australia comes after US tobacco giant
Philip Morris suffered its fifth consecutive courtroom loss when an
Oregon jury ordered the company to pay almost $150 million in
damages in the case of a woman who died of lung cancer after smoking
light tar cigarettes.