It's not news that the tobacco industry has been the target of considerable litigation, particularly in the USA. It's less often reported that the industry has won the vast majority of cases to date.
The headlines are often about cases being filed or early-stage decisions in favour of plaintiffs. There can be less attention given to final outcomes in favour of the tobacco industry, which often come on appeal.
Smoking and health litigation originated in the USA because of the unique characteristics of its judicial system. The tobacco industry has a strong record of winning these cases and we, along with many analysts, believe this will continue, although it's always possible that sometime, somewhere, a smoking and health case will be lost.
Types of case
There are a number of different types of claim which have been brought against the tobacco industry. The three most common are:
- Recoupment actions, also known as third party reimbursement cases, are where health care providers or similar organisations seek to recover the costs of treating diseases linked to smoking.
- Class actions are where a group of people jointly bring a single claim alleging that there are common issues which affect them all.
- Individual actions are brought by a single person who alleges, for example, that they have suffered damage to their health due to smoking.
In some cases, the plaintiff or plaintiffs may seek to recover what are known as punitive damages in addition to compensatory damages.
In the USA, several special factors lead to litigation that are not replicated in any other country, which is why large volume and high value litigation has spread to few other parts of the world.
While it is difficult to predict the outcome of every lawsuit in every country, our companies will continue to vigorously defend smoking and health litigation, drawing confidence from the industry's exceptionally good record when the law is properly applied.
Brown & Williamson Tobacco
Our exposure to US litigation has been reduced by the formation of Reynolds American Inc. in 2004, when R.J. Reynolds Tobacco combined with our former US business, Brown & Williamson Tobacco.
This means that we no longer have a wholly-owned subsidiary operating in the US market; instead, we have a 42 per cent shareholding in Reynolds American. Reynolds American now manages and co-ordinates Brown & Williamson defendant cases.