16.1.1 The process of litigation
To put personal injury claims in their context, this Part will be structured to follow the overall process of civil litigation. First, it is appropriate to consider the plaintiff. The history of smoking in Australia means that different plaintiffs will face different obstacles in their claims. Second, the process of pleading a claim is examined. The difficulty involved in articulating the claim has been an obstacle for plaintiffs in Australia. Third, if pleading meets the requirements imposed by the courts, there are a series of additional preliminary stages. These include the process of obtaining evidence from the tobacco industry. Difficulties have arisen as a result of the document 'retention' policies adopted by at least one member of the Australian tobacco industry. Finally, if the claim makes it to a substantive hearing and the plaintiff is successful, the court must determine what damages to award against the tobacco company defendant.
16.1.2Choosing a plaintiff
Many personal injury claims are relatively simple. Person A does something wrong, and—due to various circumstances—Person B falls victim to the wrongdoing. This description is appropriate for injuries sustained when falling down poorly constructed stairs, receiving sub-standard medical treatment or eating contaminated food. Even if there is a delay between A's actions and the convergence of circumstances (B walking down the stairs, A missing a diagnosis, B eating the food), there is usually a direct link between the circumstances and the injury. The connection between wrongdoing and injury is clear and easy to explain. In addition, B cannot usually avoid the injury.
In tobacco claims, the link is usually less immediate. There are two reasons for this. First, the choice to start and continue smoking is at least partially voluntary. While most smokers begin smoking in childhood and most find it hard to quit because of addiction, not everyone in the community takes up smoking and not all smokers are unable to quit. This means that the link between the wrongdoing and the illness is less direct than in many other types of cases.
Second, smokers usually smoke over a considerable period of time, and there is usually a long period between commencing smoking and developing a smoking-related illness. The duration of smoking and the long time delay before injury mean that a range of factors may have contributed to the decision to continue smoking, and that the illness itself may be argued to have been caused by other factors.
The delay and the lack of a direct connection mean that variations in each smoker's history of smoking can be important. For example, prior to 1974 there were no health warnings on cigarette packs. The first warnings that were introduced were extremely muted when compared to today's health warnings. They simply stated that 'Smoking is a Health Hazard'. Over time, the warnings became more explicit and communicated more easily understood consequences. And, at the same time, more information became available to the general community about the dangers of smoking.
Other factors to consider are the smoker's age at initiation and attempts to quit. A common claim is that, had accurate and sufficient information about the dangers of smoking been made available, the smoker would not have taken up smoking, or would have quit earlier. A jury is less likely to believe this claim if it is made by a smoker who has not tried to quit than if it is made by a smoker who has tried to quit on multiple occasions after becoming better informed of the health consequences of smoking. Among plaintiff lawyers, a claim from a smoker who commenced smoking prior to the introduction of health warnings, at a young age (when he or she could not have been expected to know better), at a time of saturation advertising of tobacco products, and who has since tried unsuccessfully to quit, is considered to have the greatest prospects of success.
In order to reduce the costs of bringing individual claims against the tobacco industry, attempts are often made to have cases heard together. Such cases are known as class actions, or representative proceedings. Class actions allow many individuals' claims against the same defendant to be heard, but only where the individuals' claims arise out of the same or similar circumstances. This would allow, for example, a generic discussion of whether particular aspects of tobacco advertising had the potential to be deceptive, before considering whether any particular person was in fact deceived. By discussing such matters generally, an assessment of the tobacco industry's conduct can be made. This separates the general evidence about the industry's actions and failures to act from the specific evidence about the individual. As will be discussed later, the general evidence about the industry's actions needs to be extremely detailed. Adducing such evidence in each claim would be extremely costly.
In Australia, class actions can involve both multiple plaintiffs and multiple defendants. Class actions against multiple defendants are especially relevant for tobacco litigation where smokers have switched brands during their smoking lives. If a smoker had switched brands, and was claiming against a single manufacturer, the manufacturer may be able to argue that its individual actions were not responsible for the plaintiff's choices or the plaintiff's disease. Other manufacturers' actions, it would be argued, would themselves have caused the decision to smoke and the subsequent illness.
Class actions are attractive for a range of reasons. Especially in tobacco litigation, the preliminary stages of cases may run for years and involve many days or weeks of legal argument. The elements of the action relevant to the behaviour of the tobacco industry are likely also to take significant time and involve multiple witnesses for both the plaintiff and defendant. As such, the more plaintiffs there are, the more people there are to absorb the costs of litigation. In addition, the more plaintiffs there are, the greater the exposure faced by the defendant and the greater the pressure to settle.
16.1.3Pleading a case
Once a plaintiff has decided on the precise claim that he or she wishes to make against the defendant, it is necessary to set this claim out in a way that the court will accept. This process is known as pleading, and is the beginning of the litigation process.
Pleading is considered necessary on the grounds of procedural fairness. Without proper pleading, a defendant does not know the nature of the claim that is brought against it, and is unable to defend the claim. To be successful, pleading requires assertion of the facts that the plaintiff intends to rely on to prove his or her case. The plaintiff must also set out the general rules of law which the court would apply to the facts in order to find in the plaintiff's favour.
Pleading requires the plaintiff to set out:
- The circumstances during which the harm was caused. (e.g. the smoker began smoking at the age of 13 and smoked 'full-strength' X Cigarettes for 10 years. He was concerned about the effects of smoking 'full-strength' cigarettes and so he switched to X Lights, which he smoked for another 20 years.)
- The defendant's breach of a legal obligation. (e.g. Company A knew that smokers such as the plaintiff were concerned about the effects of smoking full-strength cigarettes and marketed 'light' cigarettes to health-conscious smokers such as the plaintiff in ways designed to persuade smokers that 'light' cigarettes were less harmful than full-strength cigarettes. Company A knew that X Lights were, in fact, no less harmful than full-strength cigarettes and that smokers such as the plaintiff believed that they were. Company A breached the Trade Practices Act 1974 (Cth) (by engaging in misleading or deceptive conduct) and its duties under common law negligence.)
- What the defendant should have done and should not have done. (e.g. Company A should have provided its customers with all information in its possession regarding the comparative health effects of smoking full-strength cigarettes and X Lights. It should not have marketed 'lights' in a misleading way. This would have enabled its customers to make an informed decision about whether to continue smoking.)
- How the harm was caused. (e.g. the plaintiff developed lung cancer at the age of 48. If the plaintiff were properly informed of the comparative health effects of smoking X Lights, he would have quit smoking altogether instead of switching to X Lights and he would have been less likely to contract lung cancer.)
- The nature of the harm suffered by the plaintiff. (e.g. the extra medical costs the plaintiff has incurred to treat the cancer, loss of wages, and damages for pain and suffering.)
The sufficiency of pleading is determined by examining the specificity of the plaintiff's allegations (i.e. what, when, where and by whom). Pleadings are sufficient if they allow the defendant to understand the claims that are being made against it.
16.1.4Pleading tobacco litigation
In many circumstances, sufficiency of pleading is straightforward. This is the case, for example, where the claim is that the defendant's actions were in breach of a legal duty it owed and caused direct harm to the plaintiff's interests, which the plaintiff was unable to remedy. However, as noted above, claims against the tobacco industry involve less immediate consequences than are alleged in the more usual, run of the mill personal injury cases. The less immediate the connection between the defendant's action and the plaintiff's harm, the greater the level of detail required to satisfy the court that the defendant understands the claim made against him or her.
Given the nature of the allegations made against the tobacco industry, it is necessary to set out in detail the nature of the relationship between the smoker and the manufacturer, including how the tobacco industry's actions affected the plaintiff's decision to commence and continue smoking. For example, plaintiffs are required to plead in detail the basis on which it is alleged the tobacco companies owed a duty to inform their customers of relevant information and when the duty to inform customers arose.
In addition to these general requirements, class actions present their own challenges. Class actions are harder to plead than single person claims, because the court must be satisfied that there is a common question of fact or law that is applicable to each individual claim, as well as being satisfied that it is more convenient to answer the question (or questions) in a general way than at a single hearing.
Pleading claims against the tobacco industry is already difficult. Where a class action is brought, it allows the tobacco industry to argue not only that the pleadings are insufficient in themselves, but also that they are insufficient for a class action. The courts have, until very recently, consistently adopted very stringent tests regarding the level of pleading that is sufficient for a class action, making it difficult to satisfy the court that the pleadings are sufficient.
16.1.5Preliminary interlocutory arguments
The nature of tobacco litigation means that the tobacco industry has many opportunities to complain that pleadings are insufficient. The usual manifestation of such complaints is that the plaintiff has not adequately set out the facts on which the plaintiff relies in order to justify a claim. The specifics of some objections have more merit than others. In one case, Philip Morris challenged a statement of claim because it did not specify whether Philip Morris Ltd or Philip Morris (Australia) Ltd was the direct manufacturer of the brand of cigarettes smoked by the plaintiff. Another manifestation of such complaints is that the plaintiff has not adequately set out the claim that is made against the defendant. That is, the claim does not specify why the tobacco industry's actions were in breach of a legal obligation and how this alleged breach caused the plaintiff injury.
Such complaints are accompanied by applications to have the claim thrown out or diminished as much as possible. These applications involve a series of standard arguments. In addition to arguing that the claim is unclear, other criticisms are often made including:
- The threshold requirements for commencement of a representative proceeding have not been met. As noted above, a representative proceeding may only be heard where there are sufficiently similar questions of fact or law. The threshold requirements for commencement of the proceeding will be met if a prima facie case is made in the pleadings. A defendant may argue that the claim, when applied to individual plaintiffs, does not involve sufficiently similar questions of fact or law.
- The claim lies outside the jurisdiction of the court. If the court is set up by legislation (such as the Federal Court of Australia, the New South Wales Dust Diseases Tribunal and the Consumer Claims Tribunal), the legislation will describe the types of dispute that the court is authorised to decide. If one part of the claim falls squarely within the jurisdiction of the court, it is appropriate for the rest of the claim to be heard at the same time. A defendant may argue that none of the claims made by the plaintiff fall within the authorised types of dispute.
After all the preliminary challenges to a claim have been heard (a process which can take several years), the claim can continue toward the substantive hearing.
Before the hearing occurs, both the defendant and the plaintiff have to marshal the evidence they will use to prove their case. Evidence comes from a variety of sources. One source is from the parties themselves. Parties to litigation have an obligation to make available to the other side all documents in their possession that may tend to prove or disprove either side's claim. This obligation is known as discovery.
As with pleadings, discovery obligations are based on the need to ensure both parties receive procedural fairness. It would obviously be extremely unfair if a plaintiff (defendant) were to bring (defend) a claim while denying the other side access to documents that would be fatal to the claim (defence). In most courts, discovery obligations extend to requiring a representative of each party to provide a list of all documents sought by the other party, and to swear on oath that the list is comprehensive.
As with all other aspects of tobacco industry legal defence, the practice of the tobacco industry has been to make discovery as difficult as possible for the plaintiff. Standard practices include: withholding documents by taking extremely narrow interpretations of requests for discovery; making tenuous claims of legal privilege over documents; and, at the other extreme, deluging the plaintiff with thousands of irrelevant documents which will be extremely costly and time-consuming for the plaintiff's legal advisers to examine. A more remarkable approach to discovery—destroying documents such that they are unable to be discovered when the time for discovery arrives—was revealed in the case of McCabe v British American Tobacco, which is outlined in detail in Attachment 16.1.
16.1.7The substantive hearing
Once all the preliminary matters have been decided and all the documents obtained, the claim is finally ready for a substantive hearing. This will involve the examination of the actual questions in dispute such as knowledge, deception, intention and conspiracy (for the tobacco companies) and reliance, addiction and causation of disease (for the smoker).
Based on previous cases, it appears likely that a tobacco company defendant would engage in sustained argument on all relevant factual and legal issues. The tobacco company defendant would likely argue that the plaintiff's condition was not actually caused by smoking, and would likely lead evidence of any conceivable alternative contributor to the plaintiff's condition. It would also either deny or refuse to concede that smoking causes disease or that it is addictive.
The tobacco company defendant would also seek to show that smoking was entirely the plaintiff's responsibility. It would argue that everyone, including the plaintiff, has always known that smoking is harmful. In cases in the United States and Scotland, this has involved leading evidence of virtually every newspaper article or television news story about smoking and health that the plaintiff might ever have seen. Using this basis, the tobacco company would argue that the plaintiff voluntary assumed the risks of smoking. It would seek to dismiss any suggestion that its marketing caused or contributed to the plaintiff's smoking, that the plaintiff was not sufficiently aware of the risks of smoking, or that the company was responsible for the addictiveness of its products that ultimately kept the plaintiff smoking.
To illustrate these arguments, one can examine the defences lodged by tobacco companies in Scanlon v American Cigarette Company and Laurie v Amaca, two cases that commenced in 1986 and in 2006 respectively. The defences are almost identical. The defendant in both cases denied that there is any link between smoking and disease. However, in both cases, the defendant also went on to plead that during the relevant periods, the plaintiff knew that:
- smoking could cause lung cancer and other diseases;
- smoking was hazardous to the smoker's health;
- smoking was an activity that was difficult to quit; and
- in order to avoid the health risks associated with smoking, it was necessary for him or her to quit smoking tobacco.
In such cases the defence pleads that, even if the plaintiff's injuries were caused by smoking, the plaintiff voluntarily accepted the risks referred to above. The defence argues that tobacco manufacturers, in complying with mandatory warning legislation, should be deemed to have done all that they could do to bring the health effects of smoking to the smoker's attention. According to the tobacco companies, if the smoker chooses not to believe what she is told, she cannot for that reason say that she did not fully appreciate the risk.
At the hearing of these issues, the tobacco company defendant would be likely to engage in lengthy cross-examination of the plaintiff and his or her witnesses and to call multiple witnesses of its own. Any factual findings or legal decisions adverse to the defendant can then be expected to be appealed to higher courts.
Once all the preliminary matters have been decided, all the documents obtained and the substantive hearing has taken place, judgement will be handed down.
If the plaintiff is successful, the defendant or defendants will be required to pay damages to the plaintiff. Ordinarily, the amount to be paid is that which is required in order to compensate the plaintiff for his or her loss. The courts acknowledge that this is a difficult process, and that money is an artificial means of providing compensation for such an unquantifiable value as loss of enjoyment of life.
In the US, large awards of damages result from three considerations. The first is a large sum for pain and suffering. The second is the aggregation of claims in a class action (discussed above). The third is the award of punitive (in Australia, called exemplary) damages.
Awarding damages only as compensation limits the amount of money that a defendant may be required to pay. If the damages awarded to a plaintiff go beyond that which is necessary to compensate the plaintiff for his or her loss, they will be struck down by an appeal court. Exemplary damages are an exception to this general principle. They are awarded to punish the defendant, to deter any similar conduct in the future and to evidence the community's opprobrium of the defendant's conduct.
There are significant limits on exemplary damages in Australia. For example, they cannot be awarded if the plaintiff is dead (even if the plaintiff's death is a result of the defendant's conduct). Even where exemplary damages are available, the amounts that are awarded are, as a matter of practice, typically much lower than those awarded in the US.
16.1.9Exposure to both smoking and asbestos
The New South Wales Dust Diseases Tribunal has jurisdiction to hear claims by plaintiffs who are suffering 'dust-related conditions', such as asbestosis, byssinosis and mesothelioma. The Dust Diseases Tribunal has heard a number of claims that relate to the interaction between tobacco and asbestos. Such claims are brought either by smokers, smokers' families or asbestos companies.
One such case is Laurie v Amaca. The case involves a claim brought by a former smoker who worked in the navy (and carried on by his wife since his death on 29 May 2006) against both British American Tobacco and Amaca (the corporation that was previously James Hardie). Laurie claimed that British American Tobacco Australia Services had breached its duty of care owed to Mr Laurie and had intentionally destroyed documents that tended to prove its knowledge that its tobacco products could cause lung cancer, with the intention of depriving potential litigants from access to these documents. The issue of document destruction was similar to that which emerged in the McCabe v BAT case. This was an important issue as it allowed the plaintiff to claim for aggravated damages, a claim not usually permitted in negligence actions for personal injury. At the time of writing, the substantive claim of this case had not been determined.
16.1.10Key differences between Australian and US litigation
Many of the difficulties of personal injury litigation against the tobacco industry outlined above are not unique to such litigation brought in Australia. The difference between the success of US tobacco litigation and the position so far in Australia can perhaps best be explained by differences in the rules and procedures that govern litigation in the two legal systems.
Most important is the fact that, in Australian litigation, the 'loser pays' principle generally applies, meaning that an unsuccessful plaintiff will ordinarily be ordered to pay the legal costs of the defendant. This is an enormous disincentive to bringing a claim against the tobacco industry. An unsuccessful plaintiff can expect to end up owing the tobacco company defendant or defendants millions of dollars. In light of the difficulties of tobacco litigation discussed above, this is a possibility that can be expected to weigh heavily on the mind of a potential plaintiff. Second, in Australia, law firms cannot recover US-style 'contingency fees', which allow lawyers to act on the basis that they will not charge if the case is unsuccessful, but will be paid a certain proportion (such as 33%) of any damages ultimately awarded. With large punitive damages verdicts available in the US, tobacco litigation is a much more lucrative prospect for US lawyers than Australian lawyers.
The combination of these factors—and the relative sizes of the two countries— means that many more cases have been brought in the US than in Australia. As more cases are brought, more become successful, and this tends to have a snowballing effect, with evidence emerging in one case then being used in subsequent cases, economies of scale developing, judgements against the tobacco industry becoming more commonplace, and more law firms recognising the potential commercial benefits of taking on the tobacco industry. This kind of momentum has been generated in the US, but not so far in Australia.
Nixon v Philip Morris, WD & HO Wills and Rothmans
Re Mowbray; Brambles Australia v British American Tobacco Australia
Exemption of tobacco-related claims from changes to negligence and trade practices law
In 2003 and 2004, the Commonwealth, the States and the Territories undertook law reform designed to address the so-called 'public liability insurance crisis'. Changes were made to negligence law and trade practices law that included imposing caps on damages recoverable in personal injury litigation and introducing 'long-stop' rules, i.e. rules that provide that claims cannot be brought more than a certain period of time (here 12 years) following the act or omission alleged to have caused damage unless the period is extended by a court. 'Long-stop' rules would obviously affect cases in which there is a significant period of time between the conduct alleged to have caused harm and the suffering of harm—cases involving tobacco-related disease being an obvious example.
The changes were proposed for reasons that had no application to claims against the tobacco industry. For example, the Victorian Premier, Steve Bracks, spoke of the need to protect 'the right of all Victorians to have access to adequate insurance coverage', and the concern that '[r] ising payouts and worldwide pressure on the insurance industry have created an environment of unaffordable premiums … These premiums are becoming unaffordable not just for doctors, but for tourism operators, small business and community and sporting associations like pony clubs and local football clubs… We have a responsibility to strike the right balance between protecting people's rights and ensuring a viable insurance industry.'
Similarly, Senator Helen Coonan, then Commonwealth Minister for Revenue and Assistant Treasurer, who had carriage of the relevant Commonwealth legislation, referred to 'the problems community groups, sporting clubs, small businesses and others have faced with public liability insurance … [I] n the absence of a strong, affordable and sustainable public liability insurance market, the broad range of consumer protections that have been built up over the years are, really, worthless. The legislation seeks to balance the need for affordable public liability insurance with appropriate protections in the event of personal injury or death.
Much of the legislation would, however, in the absence of exceptions, make claims in respect of tobacco-related disease more difficult, because it is drafted very generally and would apply to such cases, even if only inadvertently. This has been recognised by a number of legislatures, with specific exceptions relating to tobacco included in the Trade Practices Act 1974 (Cwlth) (sections 82, 87, 87D, 87E and 87F), the Civil Liability Act 2002 (NSW) (section 3B), the Wrongs Act 1958 (Vic) (sections 19, 28I, 45, 69 and 81), the Limitation of Actions Act 1958 (Vic) (section 27B), the Civil Liability Act 2003 (Qld) (section 5), the Civil Liability Act 2002 (WA) (section 3A) and the Civil Liability Act 2002 (Tas) (section 3B).
Relevant news and research
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.(Last updated May 2019)