TOBACCO FIRM DEFENDS DESTRUCTION OF DOCUMENTS
Lawyers for British American Tobacco Australia Services have appealed against an award of over $400,000 in damages to a dying smoker because the tobacco company destroyed internal documents. If BATAS wins its appeal, the prospects of successful legal actions against it by injured smokers are limited. If the original decision stands, BAT - the world's second largest tobacco company - may be rendered defenceless in new cases in Australia and anywhere else where the destruction of potentially damaging documents occurred.
By Bob Burton
Canberra: [Recently], a court in the Australian state of Victoria was packed as lawyers for a British American Tobacco (BAT) subsidiary sought to overturn an award of over $400,000 in damages to a dying smoker, because the tobacco company destroyed thousands of pages of internal documents.
For the world's second largest tobacco company, which sold 807 billion cigarettes in 2000, the outcome of the case before the Victorian Court of Appeal's Blue Court has global ramifications. If British American Tobacco Australia Services (BATAS) wins its appeal, the prospects of successful legal actions against it by injured smokers are limited. However, if the original decision stands, BAT may be rendered defenceless in new cases in Australia and anywhere else where the destruction of potentially damaging documents occurred.
On 25 March, a 51-year-old dying smoker, Rolah McCabe, won her damages claim after Victorian Supreme Court Justice Geoffrey Eames struck out BATAS's defence on the grounds that it had deliberately destroyed or removed documents that would have been relevant to the case. In his decision, Eames wrote that the process of discovery - obtaining access to the documents relevant to the case held by the defendant - 'was subverted by the defendant and its solicitor Clayton Utz'. The destruction of documents, Eames wrote, was 'with the deliberate intention of denying a fair trial to the plaintiff, and the strategy to achieve that outcome was successful. It is not a strategy which the court should countenance.'
On 3 September, counsel for BATAS, Allan Myers QC, argued before three appeal court judges that unless the original decision was overturned, the court would be setting a global precedent in the need for companies to retain documents even if there were no current legal proceedings they were relevant to.
Myers argued that it was erroneous to suggest companies should retain documents 'just because it is contemplated or even expected that there might be litigation'.
Myers told the appeal court that Eames' adverse finding that the real intent of BAT's 'document retention policy' was the destruction of potentially embarrassing documents was 'totally unjustifiable'. Myers did, however, acknowledge that Clayton Utz had 'technically' breached the court order for the discovery of documents.
It is an argument that Jonathan Liberman, a public health lawyer for VicHealth Centre for Tobacco Control, finds extraordinary. 'Only a tobacco company could seriously argue that it should be allowed to destroy all its incriminating documents as long as it destroys them the day before the case against them is commenced,' he said.
Counsel for McCabe, Tom Hughes QC, told the court that the destruction of documents was contrary to the interests of justice. 'A likely defendant is not acting in the administration of justice by knowing that a product liability claim is likely to be brought against him, [and] destroys documents,' Hughes told the court.
Eames found that BAT's 'document retention policy' was devised in 1985 in expectation that the company would be subject to future legal actions. While the policy was explained in terms of time and cost efficiency, Eames pointed out that a lawyer who advised BAT actually gave evidence to the contrary.
'Ms Chalmers told me that she had no doubt that the desire to get rid of documents had nothing to do with considerations of space and efficiency, but was related to the danger which the documents posed to the defence of future litigation,' he wrote in his decision. He also found that large quantities of documents had been destroyed in 1998, following the dismissal of another unsuccessful case against BAT Australia, and that documents had been 'warehoused' offshore by a US law firm in the expectation that it would put them beyond the reach of Australian courts.
Tobacco control lobbyists too are keeping a close watch on the outcome of the case. 'If BAT wins the appeal, you would wonder how you could mount a successful action against the tobacco industry when they have gone ahead and systematically destroyed the evidence you would use in the case,' said Denise Sullivan, the manager, policy and tobacco programme for the Cancer Foundation of Western Australia.
A decision on the appeal is unlikely to be handed down until later this year or early 2003.
Even if BATAS wins the appeal, it still faces legal backwash from the case.
[Recently], lawyers from the US Department of Justice spoke to McCabe's Melbourne-based lawyers to examine whether the destruction of documents operated worldwide and could have affected cases launched by smokers against BAT's US subsidiary.
For her part, McCabe has left the argument to her lawyers because of her poor health. While doctors give her little time to live, she has donated 10% of the damages award - some $40,000 - to fund an education campaign by the Cancer Council of Victoria.
'I want to say to young girls today, "don't make my mistake". Don't get sucked in by the tobacco companies,' McCabe said in launching the fund earlier this year. - Third World Network Features/IPS
About the writer: Bob Burton is a correspondent for Inter Press Service, with whose permission the above article has been reprinted.
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