British tobacco companies are bracing themselves for a series of financially devastating court challenges after one of the world's most powerful tobacco giants was ordered to pay a record £6.5 billion by a court last week.
Lawyers have hailed the ruling against Philip Morris USA as the successful debut for a series of legal attacks across the world that could embroil British cigarette makers - already fighting to recover from a number of costly legal bans, fines and falling share prices - for years to come.
'The tobacco industry is well on its way to becoming a pariah industry in the UK,' said Amanda Sandford from the anti-smoking group, Ash. 'We've had the health argument and the economic argument but now we're having the moral argument about how the industry aggressively and deliberately sets out to hook children and deceive their customers.'
British tobacco companies are already attempting to find ways to combat the recent ban on advertising and the forthcoming European ban on describing cigarettes as mild, light or low- tar from September; a ban that will force one of the world's most famous cigarette brands, Marlboro Light, to change its name.
Under the same laws, UK companies Gallagher and Imperial will be compelled to increase the size of health warnings on their packets by more than 30 per cent. They also risk being forced to print graphic photographs of cancerous lungs and black teeth on packets, alongside blunt health warnings including 'Smoking is Suicide'.
But the industry is determined that its market position will emerge unscathed from the challenges: 'This industry has a great future,' insisted Dave Betteridge, spokesman for British American Tobacco, the largest tobacco company in the world after Philip Morris.
'All businesses make mistakes but governments are torn in their attitudes towards us; their departments of health would like to stop smoking but their treasuries couldn't do without us,' he added. 'All we're asking for is some time to show that we've changed.'
In the first group-action lawsuit ever won against a tobacco company and the first low-tar cigarette case to reach trial, Philip Morris was found guilty by the Illinois court of deliberately misleading smokers into believing that light cigarettes were safer than regular brands.
'These "lights" claims are particularly challenging for the whole tobacco industry,' said Martin Feldman, a tobacco analyst at Merrill Lynch, pointing out that nearly identical lawsuits have been filed in 11 American states. The lawsuits accuse each of the world's biggest tobacco companies of violating state consumer protection laws by failing to deliver on a promise of lower health risks with 'light' cigarettes.
Philip Morris immediately denounced the verdict and said it would appeal. But to do so, it will have to post a £7.7 billion appeal bond at the court, which tobacco analysts insist it cannot afford.
'This verdict ignores the law, it ignores the facts and it defies common sense,' said William S. Ohlemeyer, vice president and associate general counsel at Philip Morris, who added that the company will contest the size of the bond. 'It is the kind of decision that causes people to laugh at what happens in courtrooms.'
Professor Stan Glantz, who led the campaign to banish smoking from California's bars, restaurants and public parks during the Nineties and whose investigations into smoking's dangers formed the background for the film, The Insider, starring Russell Crowe and Al Pacino, disagrees.
'There's no single magic bullet that will destroy the world's tobacco companies but we're making tremendous process,' said Glantz, who also helped US state attorneys win a total of £133bn in settlements with the tobacco lobby. 'The prospect of a world free of the tobacco industry is looking more likely than I would ever have thought possible a few years ago.'
The ruling came as the tobacco industry was still struggling to come to terms with the ruling earlier last week by the US Justice Department that companies could be forced to forfeit £185bn in profits derived from half a century of fraudulent and dangerous marketing practices.
In a condemnation that will affect tobacco companies across the world, the US Justice Department accused the industry of running what amounted to a criminal enterprise by manipulating nicotine levels, lying to their customers about the dangers of tobacco and targeting children in their multibillion-pound advertising campaigns.
