The Group is involved in a number of legal and regulatory court proceedings in a number of countries. These proceedings may be characterised as covering smoking and health issues and include claims for personal injury and claims for economic loss arising from the treatment of smoking and health related diseases. Regulatory proceedings may result in a challenge to new regulations. In addition, there are legal proceedings and a governmental investigation in Canada arising from alleged past smuggling activities with consequent claims for unpaid excise tax. A fuller analysis of current legal proceedings to which the Group is subject is set out in Note 30: Contingent liabilities and financial commitments of the Annual Report and Accounts and the Summary financial statement and notes of the Annual Review.

While it is impossible to be certain of the outcome of any particular case or of the amount of any possible adverse verdict, the Company believes that the defences of the Group companies to all these various claims are meritorious both on the law and the facts. Nevertheless, it is not impossible that the results of operations or cash flows of the Group could be materially affected by the final outcome of any particular litigation.