Background: The plaintiff
Rolah Ann McCabe is a 51 year old woman "seriously ill with lung
cancer". She "has a life expectancy of, at best, months, possibly
only weeks. She claims compensatory, general [ie pain and suffering]
and exemplary [called "punitive" in the United States] damages for
personal injuries." [4] (Note: the claim for exemplary damages was
abandoned on 4 April, in part because the plaintiff's health was
such that she may not last through a trial of the length that would
be required to make the case for exemplary damages.)
The defendant
"The defendant [British American Tobacco Australia Services
Limited] is the successor to W.D. & H.O. Wills (Australia)
Limited (hereafter referred to as "Wills"), which was in existence
between September 1958 and March 2000." [8]
Consequences if the plaintiff were to die before verdict -
damages available to estate restricted
"In the event that the plaintiff were to die before verdict then
a successful verdict for damages for the benefit of her estate would
not include general or exemplary damages and pecuniary loss damages
would be significantly restricted." [6]
The nature of the case
"The plaintiff's statement of claim alleges that from her early
teens (having commenced smoking at age 12) she became addicted to
cigarettes [Capstan and Escort [173]] manufactured by the defendant,
and that as a result of that addiction and the properties of the
cigarettes, she contracted lung cancer. The plaintiff alleges that
the defendant, itself or through its predecessor and affiliated
companies, knew that cigarettes were addictive and dangerous to
health, and by its advertising targeted children to become
consumers. The plaintiff alleges that the defendant, knowing the
dangers of addiction and to health of consumers, took no reasonable
steps to reduce or eliminate the risk of addiction or the health
risks, and ignored or publicly disparaged research results which
indicated the dangers to health of smoking." [7]
The importance of the defendant's documents to the case
In cases such as this one, questions as to what the defendant
knew, when it knew it, and what it did with its knowledge are
critical.
"It is clear that the plaintiff's case against the defendant will
direct attention to the question of what was known to the defendant
as to the risks of smoking, the addictive properties of cigarettes,
the considerations and knowledge which bore upon the defendant's
decisions as to the manufacturing process, and advertising campaigns
concerning its products, and, in particular, its knowledge as to the
consumption of cigarettes by children. It is also clear that
contemporaneous and historical documents held by the defendant
relating to scientific research, not only that held in the public
domain but also research conducted by scientists acting on its
behalf, on behalf of other tobacco producers, and also research
conducted by outside agencies on behalf of the defendant or the
tobacco industry, would be of very great importance to the
plaintiff's case. Equally important might be any internal memoranda
reflecting the defendant's response to such research and its
knowledge and actions as to relevant issues." [12]
Plaintiff's application that the defence be struck out
On 25 January 2002, counsel for the plaintiff applied for an
order that the defendant's defence be struck out. [1] [The
application sought that the defence be struck out such that the
defendant would be held liable for the plaintiff's injury, with only
the amount of damages to be awarded to be determined by the court.]
The grounds for this application included [2]:
* The destruction of potentially relevant documents by the
defendant, at a time when litigation was apprehended, has rendered
it impossible for the plaintiff to have a fair trial;
* The defendant, through counsel, solicitors and deponents to
affidavits, has misled the court and the plaintiff as to the true
situation concerning documents discoverable in the trial;
* The defendant's conduct caused severe prejudice to the
plaintiff.
Plaintiff's application granted by Justice Eames - Defendant's
defence struck out, judgment entered for plaintiff, with amount of
damages to be assessed.
The conduct of BAT and its solicitors, Clayton Utz, had denied
the plaintiff a fair trial. This had been their "deliberate
intention". That outcome could not now be "cured".
"At all times since 1985 when the modified Document Retention
Policy was implemented, under the guidance of Clayton Utz
[solicitors for the defendant], litigation was either on foot or the
defendant considered that future litigation was inevitable." [289]
"The defendant intended that by the destruction of documents any
plaintiff in the position of the present plaintiff would be
prejudiced in the conduct of their action, both generally and, in
particular, in the ability to lead relevant evidence or to cross
examine witnesses. It was intended by the defendant that any such
plaintiff would be denied a fair trial." [289]
"The civil litigation system is an adversarial process, but it is
a process governed by rules which the judges must administer. The
formal rules of procedure [ie including document discovery]
complement and acknowledge the inherent powers of the Court which
apply with the overriding objective of ensuring that parties to
litigation receive a fair trial. Central to the conduct of a fair
trial in civil litigation is the process of discovery of documents.
That process is particularly important where documentary evidence is
likely to be both voluminous and critical to the outcome of the
case, and where access to documents is very much dependent on the
approach adopted by one party and its advisers. For a fair trial to
be assured in such circumstances the approach which that party must
adopt may well conflict with its self-interest. The party which
controls access to the documents must ensure that its opponent is
not denied the opportunity to inspect and use relevant documents,
and it must disclose fully and frankly what has become of documents
which have been in its possession, custody or control." [383]
"In my opinion, the process of discovery in this case was
subverted by the defendant and its solicitor Clayton Utz, 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, and it is not an
outcome which, in the circumstances of this case, can now be cured
so as to permit the trial to proceed on the question of liability.
In my opinion, the only appropriate order is that the defence should
be struck out and judgment be entered for the plaintiff, with
damages to be assessed."[384]
The suppression order
Given the seriousness of Justice Eames' findings against BAT and
its solicitors, and the inevitability of these findings being the
subject of significant media coverage, Justice Eames has imposed a
suppression order to prevent the publication of matter relevant to
the striking out of BAT's defence. The suppression order will be in
place until the jury has delivered its damages verdict, to protect
the jury against being influenced by matters not relevant to their
task.
IMPLICATIONS OF JUSTICE EAMES' DECISION IN McCABE v BAT
Rolah Ann McCabe, a 51 year old woman with terminal lung cancer,
sued British American Tobacco Australia ("BAT") in negligence in the
Supreme Court of Victoria. On 22 March 2002, Justice Eames struck
out BAT's defence to Mrs McCabe's claim because BAT and its
solicitor, Clayton Utz, had "subverted" the process of discovery3
"with the deliberate intention of denying a fair trial to the
plaintiff" and "the strategy to achieve that outcome was
successful", ie they had, by their actions, succeeded in denying the
plaintiff a fair trial4. Justice Eames held that "it is not a
strategy which the court should countenance" and that, "in the
circumstances of this case", the outcome (ie the denial of a fair
trial) could not "now be cured so as to permit the trial to proceed
on the question of liability". Accordingly, he ordered that BAT's
defence as to liability should be struck out and that judgment be
entered for the plaintiff with damages to be assessed.
Subversion of the discovery process by BAT and its solicitors
consisted of three inter-related strategies:
* The deliberate destruction of thousands of documents and of
records of the documents destroyed, beginning in 1985;
* Misleading the Court as to what had happened to missing
documents;
* The ongoing "warehousing" of documents, ie having relevant
documents held by third parties so as to keep them from discovery,
but to have access to them should they be necessary to the defence
of the claim.
Given the seriousness of Justice Eames' findings against BAT and
its solicitors, and the inevitability of these findings being the
subject of significant media coverage, Justice Eames had imposed a
suppression order to prevent the publication of matter relevant to
the striking out of BAT's defence. The suppression order was in
place until the jury delivered its damages verdict, to protect the
jury against being influenced by matters not relevant to their task.
Implications of Justice Eames' decision for future litigation
against BAT
Justice Eames reached his decision after considering the entirety
of BAT and Clayton Utz's conduct (and also that of BAT's other firm
of solicitors, Mallesons Stephen Jaques) which denied the plaintiff
a fair trial. Though each of these strategies alone gave Justice
Eames power to strike out BAT's defence, he had a discretion as to
whether to take that step, or to allow the trial on liability to
proceed with orders designed to ameliorate the prejudice to the
plaintiff. It was the entirety of the conduct of BAT, Clayton Utz
and Mallesons which led Justice Eames to conclude that the trial
could not "now be cured".
A judge only ever decides the case before him or her. A judgment
is not prescriptive in the way that legislation is. Future cases are
assessed against the principles or guidelines set by earlier cases,
but the facts are different in each case, different judges give
different weight to different facts, and ultimately reach
conclusions based on their view of the particular circumstances of
the case before them. Thus, whether judges in future cases against
BAT reach the same conclusion as Justice Eames (that BAT's conduct
has denied the plaintiff a fair trial, and that that outcome cannot
be "cured", and that BAT's defence should be struck out and the case
proceed immediately to an assessment of damages) remains to be seen
- each future case will be decided on its merits. Presumably, in
future cases, BAT will have learned that it ought to be frank with
the Court about its destruction of documents and that it should
re-consider its ongoing document warehousing arrangements. If it
does learn these lessons and comes to the Court with a different
approach from the approach it decided to take in Mrs McCabe's case,
the results may be different.
Nevertheless, that is not in any way to underestimate the
significance of document destruction itself (putting aside, for the
moment, misleading the Court and warehousing documents). Throughout
his judgment, Justice Eames made findings about the intent behind
BAT's document destruction policy, and the effect on the plaintiff
of that conduct. On question of the intent behind BAT's document
destruction, Justice Eames found:
"The defendant intended that by the destruction of documents any
plaintiff in the position of the present plaintiff would be
prejudiced in the conduct of their action, both generally and, in
particular, in the ability to lead relevant evidence or to cross
examine witnesses. It was intended by the defendant that any such
plaintiff would be denied a fair trial." [289]
(Further such findings have been reproduced in Appendix A to this
information sheet.)
On the effects of BAT's document and records destruction, Justice
Eames noted a number of ways in which the plaintiff had been
prejudiced. These included:
* It was impossible to precisely assess what documents may have
been destroyed, and the extent to which BAT had failed to provide
full and complete discovery, though it was clear that "significant
numbers of important documents have been denied to the plaintiff by
the strategy adopted by the defendant".
* Even if the plaintiff could obtain copies of missing documents,
it would still face "serious difficulty" in making use of the
documents to prove BAT's state of knowledge of relevant matters. It
is one thing to have a defendant admit it possesses or has possessed
a document. It is quite another for a plaintiff to have possession
of a document and to seek to prove that the defendant possesses or
once possessed it.
* A former legal counsel for BAT said that there were "internal
documents, memos, and commentaries on research" (which would clearly
have been important to the plaintiff's case). "None has been
produced in this case."
* Prejudice to the plaintiff "might be immense by virtue of the
deliberate destruction of just one document, which might have been
decisive in her case". The plaintiff may have been denied "at least
one "knockout" document, if not many."
* The "real difficulty" for the plaintiff is that she cannot know
if internal research was conducted and reported upon by the
defendant. She will be confronted with "difficulties of proof which
may well not have arisen had the destruction not occurred".
* In cross-examining witnesses in the defendant's camp,
especially those with a scientific or research background", the
plaintiff's counsel would be "potentially handicapped by a lack of
knowledge of research with which those witnesses are familiar but
where documents relating to which have been destroyed".
(Appendix B to this information sheet contains Justice Eames'
full statements on these and other matters of prejudice to the
plaintiff.)
Accordingly, Justice Eames concluded that "the prejudice to the
plaintiff by the destruction of documents is considerable". He
considered this conclusion in light of his further conclusions that
this was always the intention of the defendant, and that "the belief
held by the defendant in 1998 (as it was for the whole period from
1985) was that future proceedings were not merely likely, but were
virtually certain, as indeed, proved to be the case." [288]
Thus, the arguments made by the plaintiff about document and
record destruction in this case will undoubtedly be made by
plaintiffs in future cases against BAT. And of course, BAT's
intention in destroying documents and their records was not to deny
Mrs McCabe in particular a fair trial, but to deny "any plaintiff in
the position of the present plaintiff" a fair trial. Unless BAT does
an about-face such as by discovering that it has not actually
destroyed documents and their records, there is every reason to
think that the matters that weighed heavily on Justice Eames in
relation to document destruction will weigh similarly on future
judges. Though, as stated above, this can only be observed in future
on a case-by-case basis, BAT faces the serious possibility that the
effects of its decisions and conduct in relation to the destruction
of documents will include the repeated striking out of its defence
in future cases, with countless plaintiffs able to proceed directly
to an assessment of damages, just as Justice Eames has ordered for
Mrs McCabe.
BAT's destruction of documents - destroying records of its
day-to-day business
Inevitably, BAT's document destruction will be compared to the
current Arthur Andersen/Enron document destruction scandal, and
portrayed in a similar light. Though there is a superficial
similarity, it is important that the fundamental differences between
the two cases be understood.
In the Arthur Andersen/Enron case, the destroyed documents
allegedly relate to such matters as fraud, and accounting and
financial irregularities. They are documents that are alleged to
show Enron defrauding its investors in particular ways at particular
times, ie Enron acting outside the scope of its ordinary recognised
business, doing things it should not have been doing. In contrast,
BAT has been destroying documents about the very heart of what it
has always done as a business. The fear of exposure and liability
that document destruction evidences is, in Enron's case, of
defrauding investors; in BAT's case it is of manufacturing and
marketing cigarettes in the way that it always has.
Throughout Justice Eames' judgment there are many references to
"Hold Orders" imposed on document destruction while litigation
against BAT was on foot. When litigation concluded, BAT saw windows
of opportunity to destroy documents it thought it should not destroy
while a case against it was in the courts. At one point in his
judgment, Justice Eames listed categories of documents which were
identified by the defendant as covered by a Hold Order issued in
1996, ie to be retained until completion of litigation against the
defendant. These categories included:
* "Documents relating to the smoking and health issue or the
continuing public debate, including any information relating to
allegations that smoking was connected with ill health or disease,
allegations that smoking is addictive or habit forming, components
of tobacco or cigarette products including flavouring and additives,
smoking testing and analysis of the combustion process, smoking
behaviour including information as to why people smoke or choose to
quit.
* Marketing, including documents relating to packaging,
advertising and product launches, information relating to government
health warnings, published cigarette advertisements and promotional
material from 1955 to November 1987, documents directly concerned
with the intention of effectiveness of any advertising or
promotions.
* Documents relating to public and government attitudes to
smoking and health issues and action aimed at influencing those
attitudes ...
* The records in connection with smoking and health and marketing
that had to be retained were to include correspondence, internal
memoranda and meeting minutes, discussion papers, reports, surveys
and statistical data, scientific or pharmaceutical materials, both
published and unpublished, and documents including references to
such material, books magazines and journals obtained from all
sources, audio and video tapes, films and photographs, electronic
data and computer print-outs, including floppy discs, computer
backup discs and tapes. ..." [90]
Documents such as these are documents that relate to matters at
the very heart of BAT's business: components of cigarettes; "smoking
behaviour including information as to why people smoke or choose to
quit"; "marketing, including documents relating to packaging,
advertising and product launches"; "records in connection with
smoking and health and marketing" and so on. These documents are
about the everyday business of BAT. And it is documents such as
these which were, presumably, destroyed when Hold Orders were lifted
(if not before).
Justice Eames noted the results of document destruction in the
case before him. Not a single document was discovered in relation to
"the pharmacological effect of nicotine" [124]. All "internal
documents reflecting discussion within the company about research,
advertising, addiction and other critical issues" were destroyed. Mr
Maher, then in-house counsel for the defendant, "knew at the time
how important such material would have been to the case of a future
plaintiff" [146]. And "not a single internal note, memorandum or
letter has been discovered in which any company representative
discusses its response to any research paper or any other relevant
matter" [314].
What needs to be underlined here is that the documents that are
potentially damaging to BAT, and are therefore the subject of its
document destruction policy, are documents about how it goes about
manufacturing and marketing cigarettes. When BAT goes about its
ordinary business - ie selling as much of an addictive, deadly
product as it can, knowing how many people its product is killing,
and how many people are addicted to that product, while controlling
the ingredients of its product, and using marketing techniques to
take its consumers' minds away from what its product does - it fears
the consequences if what it does is exposed.
Implications for more rational regulation of the tobacco
industry
The reason that BAT understands how damaging its day-to-day
documents are is the very reason that the current regulatory
approach to the tobacco industry is untenable, if not absurd. BAT's
anxiety about the very heart of its business must be fully
understood. It eloquently underlines why the tobacco industry should
not be allowed to continue to operate as it presently does; why it
must be regulated in a way that does not encourage it to continue to
act in a way that it deems it must always cover up, lest this be
seen by a court and judged accordingly; why it must be regulated in
a way that protects the public's health, corrects wholesale market
failure, and ensures respect for the law.
If an appropriate regulatory approach to the tobacco industry is
not adopted, we should expect the McCabe case, the stories it
exposes (of document destruction), and, even more seriously, the
stories it does not expose because of BAT's destruction of
documents, to be still being played out in ten, twenty or thirty
years in State and Federal courts across the country, as today's
smokers, the lung cancer sufferers of the 2010s, 2020s and 2030s,
look to hold tobacco companies accountable for their conduct. This
is an inefficient approach to public policy, and will continue to
cost the community in lives lost, massive economic costs, and
burdens on its legal and judicial processes. We cannot change the
past, or prevent our courts adjudicating on conduct of the past. But
we can learn our lessons and prevent the conduct of today, and of
the future, delivering the same difficulties as, we now see, has the
conduct of the past. There are rational approaches to tobacco
regulation, that would benefit the community rather than the tobacco
industry. They must now be adopted.
Appendix A
Justice Eames' findings in relation to the Defendant's intention
in destroying documents and their records
"The defendant intended that by the destruction of documents any
plaintiff in the position of the present plaintiff would be
prejudiced in the conduct of their action, both generally and, in
particular, in the ability to lead relevant evidence or to cross
examine witnesses. It was intended by the defendant that any such
plaintiff would be denied a fair trial." [289]
"I am, however, entirely satisfied that the primary purpose of
the development of the new policy in 1985 and subsequently was to
provide a means of destroying damaging documents under the cover of
an apparently innocent house-keeping arrangement." [19]
"In pursuit of the defence strategy, the wording of the Document
Retention Policy was amended so that it more firmly asserted
innocent intention and denied the true intention, which was to
prejudice the prospects of success of any plaintiff in later
proceedings." [289]
"The predominant purpose of the document destruction was the
denial to plaintiffs of information which was likely to be of
importance in proving their case, in particular, proving the state
of knowledge of the defendant of the health risks of smoking, the
addictive qualities of cigarettes and the response of the defendant
to such knowledge." [274]
"In my view, [a paragraph in the Document Retention Policy
Document] is a lawyer's attempt to disguise the reality, which is
that the primary purpose for the reduction of documents was to
impede the prospects of success of any plaintiff who brought
proceedings against the defendant. The paragraph [...] demonstrates
a recognition that the programme might be viewed adversely by
courts, and in my view the paragraph really demonstrates that the
view was taken that it was better to destroy a whole body of
documents (apart from those which had to be retained for tax audit
or other purposes not concerned with legal proceedings) so as to
ensure that all documents which had the potential to be damaging
would be removed. The paragraph constitutes a clumsy and
self-serving attempt to declare innocence but at the same time, in
my opinion, demonstrates the clear purpose behind the program."
[269]
Appendix B
Justice Eames' findings in relation to prejudice to the plaintiff
arising from the destruction of documents and their record
"It is impossible to precisely assess what documents may have
been destroyed in 1998, and earlier, and to what extent there has
been a failure to give full and complete discovery as to documents
in the categories for which I ordered discovery. It may be that some
of the documents which the plaintiff's counsel identified as
destroyed might eventually be located, either held by the defendant
or in supposedly independent data bases, or else in the public
domain. The tactics adopted by the defendant, including its
deliberate obliteration of any records of what documents it had
destroyed over the years, prevents there being certainty as to the
current position. It is, however, very clear that significant
numbers of important documents have been denied to the plaintiff by
the strategy adopted by the defendant." [290]
"The fact that the plaintiff has or could obtain copies of some
missing documents does not eliminate all prejudice which flows from
destruction of the defendant's copies. ... Even if the plaintiff can
produce documents from other sources, unless admissions are made by
the defendant the plaintiff faces serious difficulty in first
proving the documents and then of making use of the documents in
order prove the state of knowledge of the defendant." [300]
"Mr Maher [former legal counsel for the defendant] said that
there were internal documents, memos, and commentaries on research
which would have been destroyed. None has been produced in this
case." [303]
"Furthermore, the prejudice to the plaintiff might be immense by
virtue of the deliberate destruction of just one document, which
might have been decisive in her case. It would be interesting to
know, for example, how many of the Cremona [a previous case]
documents had been rated 5 (a "knockout" blow for the plaintiff) and
how many of those had been discovered in this case. The dilemma,
stressed by counsel for the plaintiff, is that they can not now
know, at least not by virtue of cross examination of any of the
witnesses who were called on this application, whether they have
been denied such documents. The people who would be likely to know
whether such documents were destroyed might be thought to be people
such as Wilson, Cannar, Schechter, Northrip, Travers and Kinross.
Whilst their unexplained absence6 leads to the inference that their
evidence would not have been helpful to the defendant, that does not
relieve the plaintiff's anxiety that she may have been denied at
least one "knockout" document, if not many." [309]
"For the plaintiff the real difficulty is that she can not now
know if internal research was conducted and reported on to Wills but
has been destroyed without any record of its existence. If that was
the case then by virtue of that fact, and compounded by the fact
that the defendant will not now make the admissions sought by the
Notice to Admit (i.e. that relevant documents have been in its
possession), the plaintiff is confronted at trial with difficulties
of proof which may well not have arisen had the destruction not
occurred." [310]
"Thus, it is clear that the destruction of records and the
failure to keep a record of what documents were held, and when and
when they were destroyed, will cause significant difficulties to the
plaintiff's counsel in proof of those documents during the trial."
[313]
"The mere fact that many scientific reports were retained does
not diminish the fact that of those retained few if any of the
research documents which the plaintiff's advisers identified and
specifically sought in this case as being of critical importance are
now to be found in the defendant's possession, and yet many of those
were documents which it unquestionably had in its possession (and,
for the purpose of the application, admits to be so) at the
conclusion of the Cremona case. Furthermore, not a single internal
note, memorandum or letter has been discovered in which any company
representative discusses its responses to any research paper or any
other relevant matter. It seems likely that what was retained as
scientific research was no more than material which was already on
the public record or material which had already been vetted as to
its capacity to harm the defendant's cause." [314]
"The destruction of documents has other disadvantages for the
plaintiff, also, and these were contemplated by the defendant's
legal advisers as an advantage which it would gain by destruction of
documents." [315]
"Documents proved to have been held by the defendant could have
been the subject of interrogatories designed to facilitate the
tender of those documents. In order to prove documents which have
not been discovered or admitted the plaintiff's counsel may be
obliged to call witnesses who are in the defendant's camp. In
calling such witnesses counsel will be bound by their answers. In
cross examination of witnesses for the defendant, especially those
with a scientific or research background, the plaintiff's counsel
will be potentially handicapped by a lack of knowledge of research
with which those witnesses are familiar but where documents relating
to which have been destroyed. Even if the witness acknowledged the
past existence of such documents, counsel would be severely
handicapped in cross-examining without the documents. Some of those
problems may be reduced or be overcome by pre-trial directions or
directions during the course of the trial as to the depth of
information required to be contained in statements of proposed
witnesses, or in other ways, but it is likely to delay the trial and
to cause inconvenient interruptions, especially if the defendant
seeks to then rely on "warehoused" documents in order to rebut
matters raised in cross-examination of its witnesses." [316]
"Advantages such as these, which would flow from the destruction
of damaging documents, were fully understood within the camp of the
defendant. I am satisfied that such motives were part of the
explanation for document destruction." [317]
"In assessing the prejudice which the plaintiff has suffered I
have to keep in mind that it is very much in the interests of the
plaintiff to emphasise prejudice and to understate the extent to
which it might be overcome. Counsel for the defendant submit, too,
that even if documents were discovered it did not follow that they
would have been admissible at trial. That, of course, may be so, but
by their destruction the plaintiff has been denied the opportunity
to attempt to have them tendered. The mere fact that documents were
held by the defendant might make them admissible for limited
purposes, at least, even if the truth of the contents of the
documents could only be established by other means." [321]
"In my opinion, the prejudice to the plaintiff by the destruction
of documents is considerable." [322]
SMOKING, ADDICTION AND RESPONSIBILITY
Responses to tobacco industry denials of responsibility
The tobacco industry routinely argues that it should bear no
responsibility at all for smoking-related disease and death. After
all, the industry says, people choose to smoke with full awareness
of the risks. They must, therefore, accept responsibility for any
diseases they suffer.
There are many powerful responses to this line of argument.
First, the approach taken by the tobacco industry over the last 40
or so years has been to publicly deny or downplay the risks of
smoking, and, in so doing, to mislead the public about the genuine
effects of smoking. Thus, the tobacco industry has found itself in
the absurd position of arguing both that there is no conclusive
evidence that smoking is harmful and that everyone knows that
smoking is harmful.
Second, tobacco industry marketing has been, and still is,
designed to portray smoking as anything other than the harmful
addiction it is. Rather, carefully researched marketing devices are
used to portray smoking as cool or sexy or rebellious and so on. The
very aim of this marketing is that as many people as possible should
use as many of the industry's products as possible. It matters not
to the industry if its aims are achieved through disingenuous
marketing. Its only interest is in the bottom line.
Third, and perhaps most important, is the matter of addiction.
The issue was explained very clearly by Paul Knopick, of the United
States Tobacco Institute, writing to a colleague in 1980 that:
"Shook, Hardy and Bacon [lawyers for Philip Morris, based in
Kansas City, US, who Justice Eames found had given advice to the
defendant and its solicitors in Mrs McCabe's case on issues of
document destruction and document warehousing] reminds us, I'm told,
that the entire matter of addiction is the most potent weapon a
prosecuting attorney can have in a lung cancer/cigarette case. We
can't defend continued smoking as `free choice' if the person was
`addicted'".
Given that the overwhelming majority of smokers commenced smoking
before turning 18, and that addiction impairs the capacity to
exercise genuine free choice, it is not hard to understand why the
whole issue of addiction is so damaging to the tobacco industry. It
is hardly surprising, therefore, that in Mrs McCabe's case, in spite
of the overwhelming evidence to the contrary, BAT has denied that
smoking is addictive. As Justice Eames said:
"As to the plaintiff's allegation that the defendants' cigarettes
were addictive, the defendant, whilst acknowledging that some
persons may find it difficult to quit smoking, denies the
allegation, and asserts that smoking is a behaviour of choice, and
does not impair the ability of a smoker to assess the risks of
smoking and to make an informed decision." [10]
Justice Eames noted that "not a single document was in fact
discovered" in the category of the "pharmacological effect of
nicotine". He said that "the implication seems overwhelming that
discovery has been fundamentally thwarted under this category by
virtue of the 1998 destruction program". [124]
Evidence that nicotine is addictive
We know that, in Australia, around 75% of smokers have tried to
quit. The evidence that smoking is addictive is beyond any serious
dispute.
As with other drugs such as cocaine, heroin and alcohol, nicotine
can produce psychoactive effects, mood alterations, strong
reinforcing effects, physical dependence and tolerance. Based on
these criteria for drug dependence developed by the World Health
Organisation, the US Surgeon General has concluded that nicotine as
delivered by tobacco smoking is addictive. The US Surgeon General
has said that: 'The pharmacological and behavioral processes that
determine tobacco addiction are similar to those that determine
addiction to drugs such as heroin and cocaine.'
The Royal College of Physicians of London recently published an
extensive report on the addictive properties of nicotine. It cited a
report by Henningfield et al rating nicotine as high or higher than
heroin and cocaine on eight out of ten criteria for addiction.
Smokers develop a tolerance to nicotine. They develop extra
receptor sites responsive to nicotine, and changes occur in the way
their brains metabolise glucose and release catecholamines. (Note:
catecholamines include adrenaline, noradrenaline and dopamine, with
roles as hormones and neurotransmitters.) This is known as the
"changed brain" syndrome. Such changes have been detected in former
smokers even many years after they have quit. Recently it has been
suggested16 that there are critical periods for the development of
nicotine dependence, that young brains respond differently to older
brains and that exposure during adolescence may produce profound,
long-lasting changes.
Knowledge within the BAT group of companies about the
addictiveness of nicotine
Documents released in the US over the last eight or so years
demonstrate that the international BAT group has known of the
addictiveness of nicotine for decades, and that it has understood
the role of nicotine addiction in smoking. The quotes referred to
below are extracted from just a small sample of those documents now
publicly available. The sources from which they have been taken are
set out.
13 February 1962
Nicotine "is a natural tranquilizer". If the increase in
production of tranquilizer drugs continues, and if "such drugs
become more freely available they will compete with nicotine".
"If the absorption of nicotine is made pleasant and attractive
this enhances the benefits just as in the case of well prepared and
well served food. However, the force of the habit or the strength of
addiction is not such as to give any grounds for complacency in the
face of alternative methods of stimulating the body to meet stress,
and that is just where the danger lies since alternative methods are
becoming available. In the last few years there has been a quite
remarkable increase in the production of tranquilizer drugs, and
while most of these need a doctor's prescription there is already
one on free sale in Switzerland. If such drugs become more freely
available they will compete with nicotine, which was a -- which is a
natural tranquilizer, and will leave smoking primarily dependent on
its psychological effects for the maintenance of the habit."
30 May 1963
Body craves for renewed drug intake to restore physiological
equilibrium "In a chronic smoker the normal equilibrium in the
corticotropin releasing system can be maintained only by continuous
nicotine intake. It means that those individuals are but slightly
different in their aptitude to cope with stress in comparison with a
non-smoker. If nicotine intake, however, is prohibited to chronic
smokers, the corticotropin-releasing ability of the hypothalamus is
greatly reduced, so that these individuals are left with an
unbalanced endocrine system. A body left in this unbalanced status
craves for renewed drug intake in order to restore the physiological
equilibrium. This unconscious desire explains the addiction of the
individual to nicotine."18
17 July 1963
Large part of tobacco industry business is administration of
nicotine "It may be useful, therefore, to look at the tobacco
industry as if for a large part its business is the administration
of nicotine (in the clinical sense)".19
7 August 1964
The kick of a cigarette is "a product of the quantity of nicotine
in the smoke and the speed of transfer of that nicotine from the
smoke to the blood-stream." A 1964 document from H. D. Anderson,
vice president of research and development (R&D), to R. P.
Dobson, president of BAT, discussed adding potassium carbonate to
tobacco: "There seems no doubt that the 'kick' of a cigarette is due
to the concentration of nicotine in the bloodstream which it
achieves, and this is a product of the quantity of nicotine in the
smoke and the speed of transfer of that nicotine from the smoke to
the blood-stream."20
24 -27 October 1967
"Smoking is an addictive habit attributable to nicotine ..."
BAT's 1967 Research Conference is held in Montreal. Draft minutes
list "Assumptions made by R&D scientists": "Smoking is an
addictive habit attributable to nicotine and the form of nicotine
affects the rate of absorption by the smoker ... It was likely,
moreover, that tobacco would be involved in legislation of a food or
drug administration nature in respect both of product and of
manufacturer." A hand-written not changes "addictive habit" to
"habit". The completed minutes state that "There is a minimum
necessary level of nicotine. Smoking is a habit attributable to
nicotine. The form of nicotine affects the rate of absorption by the
smoker".21
September 1969
"Nicotine has well documented pharmacological action." D.J. Wood
from R&D at BAT gives a presentation to company executives:
"Nicotine has well documented pharmacological action. It is claimed
to have a dual effect, acting both as a stimulant and a
tranquilliser. It is believed to the responsible for the
'satisfaction' of smoking, using this term on the physiological
rather than the psychological sense".
29 March 1976
If nicotine delivery is reduced below a "threshold 'satisfaction'
level", smokers "will question more readily why they are indulging
in an expensive habit".
"If the nicotine delivery is reduced below a threshold
'satisfaction' level, then surely smokers will question more readily
why they are indulging in an expensive habit," Green, senior BAT
scientist.
19 May 1977
"Unable to stop (by and large) and ... would basically prefer to
stop (if they could)".
A memo from Dr. Jagger of BAT's Brazilian subsidiary Souza Cruz:
"If you ask people why they carry out a practice which they are
unable to stop (by and large) and which they would basically prefer
to stop (if they could) it is reasonable to expect them to take
considerable refuge in justifications - i.e. enjoyment, pleasure,
taste, satisfaction, tension relief. etc".24
28 August 1979:
We "are searching explicitly for a socially acceptable addictive
product". Should consider "the hypothesis that the high profits
additionally associated with the tobacco industry are directly
related to the fact that the consumer is dependent upon the
product".
A BAT document outlines "Key Areas - Product Innovation over the
Next 1- Years for Long-Term Development: "We have to satisfy the
'individual' who is either about to give up or has just done so,
i.e., in other words, customers in danger of extinction ...we are
searching explicitly for a socially acceptable addictive product
involving: - A pattern of repeated consumption -A product which is
likely to involve repeated handling - the essential constituent is
most likely to be nicotine or a 'direct' substitute for it".
"...We also think that consideration should be given to the
hypothesis that the high profits additionally associated with the
tobacco industry are directly related to the fact that the consumer
is dependent upon the product. Looked at another way, it does not
follow that future alternative 'Product X' would sustain a profit
level above most other product/ business activities, unless, like
tobacco, it was associated with dependence."
1 January 1980
Large numbers of people will continue to smoke "because they
can't give it up. ... They can no longer be said to make an adult
choice."
Dr SJ Green writes: "It has been suggested that cigarette smoking
is the most addictive drug. Certainly large numbers of people will
continue to smoke because they can't give it up. If they could they
would do so. They can no longer be said to make an adult choice".
11 April 1980
BAT should "look at itself as a drug company"
"...BAT should learn to look at itself as a drug company rather
than as a tobacco company.
16 May 1980
Company's "position on causation is simply not believed by the
overwhelming majority of independent observers, scientists and
doctors." Opinion that we "now move to position B, namely, that we
acknowledge 'the probability that smoking is harmful to a small
percentage of heavy smokers'."
"The company's position on causation is simply not believed by
the overwhelming majority of independent observers, scientists and
doctors....The industry is unable to argue satisfactorily for its
own continued existence, because all arguments eventually lead back
to the primary issue of causation, and on this point our position is
unacceptable.... Our position on causation, which we have maintained
for some twenty years in order to defend our industry is in danger
of becoming the very factor which inhibits our long term
viability....On balance, it is the opinion of this department that
we now move to position B, namely, that we acknowledge 'the
probability that smoking is harmful to a small percentage of heavy
smokers'.... ... By giving a little we may gain a lot. By giving
nothing we stand to lose everything."28
1980
"Smoking is addictive" and "many smokers would like to give up
the habit if they could".
A 1980 BATCO document clearly acknowledges that "smoking is
addictive" and that "many smokers would like to give up the habit if
they could".
7 April 1982
Offer the smoker a product with "comparatively high nicotine
levels". "If delivery levels are reduced too quickly or eventually
to a level which is so low that the nicotine is below the threshold
of pharmacological activity then it is possible that the smoking
habit would be rejected by a large number of smokers....The simple
answer would seem to be to offer the smoker a product with
comparatively high nicotine deliveries so that with a minimum of
effort he could take the dose of nicotine suitable to his immediate
needs."
12 November 1984
Nicotine "may be presented to the smoker in at least three
forms". "Free base forms" are "considerably more 'active'".
"Nicotine may be presented to the smoker in at least three forms:
(i) salt form in the particulate phase, (ii) free base form in the
particulate phase, (iii) free base form in the vapour phase. It has
long been believed that nicotine presented as in (ii)/(iii) is
considerably more 'active'."
8 August 1991
The "unique property of inhaled cigarette, the delivery of
unchanged nicotine to the brain occurring a few seconds after taking
a puff". Linda Rudge, a BAT Information Scientist, writes about
"Smoking Cessation Methods", commenting that: "Overall, most methods
have achieved, at best, only moderate success because they cannot
imitate the unique property of inhaled cigarette, the delivery of
unchanged nicotine to the brain occurring a few seconds after taking
a puff".
"Let us provide the exquisiteness and hope that they, our
consumers, continue to remain unsatisfied. All we would want then is
a larger bag to carry the money to the bank."
A further BAT report recognises that if cigarette's nicotine
level: " is so low that the nicotine is below the threshold of
pharmacological activity then it is possible that the smoking habit
would be rejected by a large number of smokers".
"Certainly the nicotine level of B&W (Brown & Williamson,
the US subsidiary of BAT) cigarettes...was not obtained by
accident....[W]e can regulate, fairly precisely, the nicotine and
sugar levels to almost any desired level management might require."
Another BAT document stated, "When a cigarette is smoked,
nicotine is released momentarily in the free-form. In this form,
nicotine is more readily absorbed through the body tissue."
Knowledge within the BAT group of companies of the dangers of
smoking, and responses
1976
"[K]eep the scientific question open."
-- Ernest Pepples, Brown & Williamson's Vice President and
General Counsel, writes an internal memo entitled "Industry Response
to the Cigarette/ Health Controversy" that the industry should
"support scientific research to refute unfavourable findings or at a
minimum to keep the scientific question open ... The significant
expenditures on the question of smoking and health have allowed the
industry to take a respectable stand along the following lines -
'After millions of dollars and over twenty years of research, the
question about smoking and health is still open'"
6 April 1978
This has "long ceased to be an area for scientific controversy".
-- The Annual BAT research conference seemed to acknowledge the
relationship between smoking and disease: "There has been no change
in the scientific basis for the case against smoking. Additional
evidence of smoke-dose incidence of some diseases associated with
smoking has been published. But generally this has long ceased to an
area for scientific controversy..."
1 January 1980
"A demand for scientific proof is always a formula for inaction
and delay and usually the first reaction of the guilty."
-- A draft of Dr. Green's paper "Cigarette Smoking and Causality"
states: "A demand for scientific proof is always a formula for
inaction and delay and usually the first reaction of the guilty
...By repudiation of any causal role for cigarette smoking in
general, lawyers hope to cut off any claim for liability without
further consideration of the specific cause in this particular
case".
16 May 1980
Company's "position on causation is simply not believed by the
overwhelming majority of independent observers, scientists and
doctors." By not acknowledging "the probability that smoking is
harmful to a small percentage of heavy smokers ... we stand to lose
everything."
"The company's position on causation is simply not believed by
the overwhelming majority of independent observers, scientists and
doctors....The industry is unable to argue satisfactorily for its
own continued existence, because all arguments eventually lead back
to the primary issue of causation, and at this point our position is
unacceptable....[O]ur position on causation, which we have
maintained for some twenty years in order to defend our industry is
in danger of becoming the very factor which inhibits our long term
viability....On balance, it is the opinion of this department that
we should now move to position B, namely, that we acknowledge 'the
probability that smoking is harmful to a small percentage of heavy
smokers'....By giving a little we may gain a lot. By giving nothing
we stand to lose everything."
February 1981
At the beginning of the 1960s, tobacco companies "realised there
was serious evidence connecting smoking and ill health". Their first
reaction "was to spend money on research to see if this was true".
When this failed, research was directed to finding a safer
cigarette, though development of substitutes. When this "flopped" in
the mid-1970s there was "a sharp change in direction". ...
[R]esearch was redirected to serve the interests of marketing."
Dr Jim Green, head of research at BAT for 20 years, summarised
the approach to research. "At the beginning of the sixties the
tobacco companies realised there was serious evidence connecting
smoking and ill health. Their first reaction was to spend money on
research to see if this was true, in the hope that it wasn't, so
they could win the argument. When this failed, the research effort
was directed to finding a safe cigarette, through the development of
substitutes. When this flopped in the mid-seventies there was a
sharp change of direction. New, corporate careerists were now in
charge of the companies and they had fewer qualms about the business
they were in; research was redirected to serve the interests of
marketing. This development coalesced rather well with the attitude
that the companies had taken towards the health risk and regulation
policy. On the advice of their PR man, they pursued a 'tight-rope'
policy on health ... and entered into voluntary agreements because
this bought them time".
Note: The availability of overseas documents does not cure the
prejudice suffered by Australian plaintiffs
It should be noted that the above excerpts of documents are drawn
from documents of the BAT international group of companies, not from
WD & HO Wills Pty Ltd (the Australian part of that group of
companies until September 1999). It should not be thought that the
availability of documents from the BAT international group of
companies removes the prejudice suffered by Australian plaintiffs
through the destruction of documents by Wills and BAT Australia.
Australian plaintiffs cannot simply use these documents to prove the
knowledge, at relevant times, of Wills and BAT Australia. Australian
plaintiffs can seek to rely on inferences that Wills and BAT
Australia probably had the same knowledge and information as their
overseas counterparts, but this is an immeasurable way short of
being in a position to prove a defendant's knowledge through its
possession of documents. Destruction of documents means that
Australian plaintiffs cannot have access to, and make use of,
documents of the nature of those extracted above, in the way that
plaintiffs in the US, in particular, can and have. The final
destruction of documents and their records creates a prejudice that
can never be fully cured. (See the discussion in Information Sheet 2
about the prejudice that destruction of documents creates for
plaintiffs.)
THE CRIMINAL OFFENCES OF CONTEMPT OF COURT AND ATTEMPTING TO
PERVERT THE COURSE OF JUSTICE
Justice Eames held that the conduct of BAT and its solicitors had
denied Mrs McCabe a fair trial, that this had been their deliberate
intention, and that the outcome they had achieved could not be
"cured". Accordingly, he struck out BAT's defence, and entered
judgment for the plaintiff, with damages to be assessed.
This itself does not mean that BAT or its solicitors acted
illegally. It was not for Justice Eames to decide whether they had
acted illegally. He was not hearing a criminal prosecution against
the defendant or its solicitors. Rather, Justice Eames was hearing a
civil claim for damages, and he was required to decide what the
consequences of BAT and its solicitors' conduct should be in Mrs
McCabe's case. Any issues relating to criminal conduct could only be
dealt with in separate proceedings, with different witnesses called,
different evidence relevant, and the criminal standard of proof of
beyond reasonable doubt, rather than the civil standard of balance
of probabilities.
There are, however, in Justice Eames' judgment, references to the
criminal offences of contempt of court and attempting to pervert the
course of justice. These can be found both in the extracts of legal
advice received by the defendant, and in the body of the judgment
itself.
The offence of contempt of court was discussed in a letter
written by Brian Wilson, a partner at Clayton Utz, to Mr F.T.
Gulson, legal counsel and secretary for the defendant, on 29 March
1990. Mr Wilson cited a 1981 High Court case, Lane v Registrar of
Supreme Court of New South Wales, and reproduced the following
quote:
“It was submitted on behalf of the respondent that conduct
otherwise lawful can amount to a contempt of court if done with a
particular intention. That is correct, but the intention must be to
do something likely to interfere with the course of justice.
An intention to interfere with the administration of justice is
not necessary to constitute a contempt; the critical question is
whether the act is likely to have that effect, but the intention
with which the act was done is relevant and sometimes important."
The offence of attempting to pervert the course of justice was
referred to by Justice Eames, when he said [359]:
"The courts have an overriding concern to protect the
administration of justice, that concern being reflected in both the
Rules and in the common law principles concerning such matters as
the criminal offence of perverting the course of justice, and the
laws of contempt. An attempt to pervert the course of justice can be
committed even though there is no particular case in contemplation
by the person committing the offence: see The Queen v Rogerson."
The material below sets out the basic principles of these two
offences.
Contempt of court
The relevant principle is that set out in the quote from Lane v
Registrar of Supreme Court of New South Wales, found in Mr Wilson's
letter, referred to above. In Lane's case, Chief Justice Gibbs, and
Justices Mason, Murphy, Wilson and Brennan said:
"An intention to interfere with the administration of justice is
not necessary to constitute a contempt; the critical question is
whether the act is likely to have that effect, but the intention
with which the act was done is relevant and sometimes important."
The critical question, in the words of the High Court justices,
was whether the act is "likely to have the effect" of "interfer[ing]
with the administration of justice". This is to be judged
objectively, ie the effect of the act, rather than its intention.
There is also judicial authority for the proposition that where a
barrister or solicitor conducts a case in a fashion so as to
knowingly deceive the court, he or she may be guilty of contempt.
The court has a broad discretion in cases of contempt to imprison
or fine a guilty party.
Attempting to pervert the course of justice
In Victoria, attempting to pervert the course of justice is a
common law offence. Section 320 of the Crimes Act 1958 (Vic)
specifies that it carries a maximum penalty of 25 years imprisonment
or a $300,000 fine.
The offence is made out in "the doing of an act which has a
tendency to pervert the course of justice with an intent to pervert
the course of justice."
The classic Australian formulation of the test of attempting to
pervert the course of justice was set out by Justices Brennan and
Toohey in the High Court case of The Queen v Rogerson. The course of
justice is "perverted (or obstructed) by impairing (or preventing
the exercise of) the capacity of a court or competent judicial
authority to do justice". There are various ways in which this may
be done. One is by "denying [the court] knowledge of the relevant
law or of the true circumstances of the case". Justices Brennan and
Toohey said:
"The course of justice consists in the due exercise by a court or
competent judicial authority of its jurisdiction to enforce, adjust
or declare the rights and liabilities of persons subject to the law
in accordance with the law and the actual circumstances of the case.
The course of justice is perverted (or obstructed) by impairing (or
preventing the exercise of) the capacity of a court or competent
judicial authority to do justice. The ways in which a court or
competent judicial authority may be impaired in (or prevented from
exercising) its capacity to do justice are various. Those ways
comprehend, in our opinion, erosion of the integrity of the court or
competent judicial authority, hindering of access to it, deflecting
applications that would be made to it, denying it knowledge of the
relevant law or of the true circumstances of the case, and impeding
the free exercise of its jurisdiction and powers including the
powers of executing its decisions. An act which has a tendency to
effect any such impairment is the actus reus [ie the act] of an
attempt to pervert the course of justice.
In the quote reproduced above, Justice Eames noted that "[a]n
attempt to pervert the course of justice can be committed even
though there is no particular case in contemplation by the person
committing the offence".
The offence requires the act of the accused to have the
"tendency" to pervert the course of justice. It is not necessary for
the prosecution to prove that the tendency actually materialised, ie
that the course of justice was, in fact, perverted. It is enough if
there is a possibility that what the accused has done "without more"
might lead to injustice.51
The offence may be committed both by individuals, and also by a
company where the individuals committing the offence are part of the
"directing mind and will" of the company.
Prosecutions
In Victoria, prosecutions are generally instituted by the
Director of Public Prosecutions. Under s22(i)(c) of the Public
Prosecutions Act 1994 (Vic), the Director of Public Prosecutions may
refer a possible contempt of court to the Attorney General who may
then make an application to the court for punishment.
FURTHER DETAIL CONTAINED IN THE JUDGMENT
At this point it is 12.20am and I’m jack of formatting but only
half way through the total document. If anyone is really thirsty for
more please email me at smayne@crikey.com.au
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