In 2001, a terminally ill woman approached Slater and Gordon with a dying wish. Rolah McCabe wanted to sue one of the world’s biggest tobaccos companies, which she regarded as responsible for her lung cancer and her lifelong addiction to cigarettes.
McCabe versus British American Tobacco
With Slater and Gordon’s help, Rolah sought damages from British American Tobacco, arguing that the cigarette giant wilfully ignored and disparaged research indicating the health risks of its products.
One of the best-known legal battles of its kind in Australia, the case marked a turning point in lung-cancer litigation. It also exposed the controversial methods used to defend Big Tobacco and its vested interests.
On April 12, 2002, Rolah and Slater and Gordon made legal history. In the Victorian Supreme Court, Rolah became the first person outside the US to obtain a verdict against the tobacco industry in a personal injury claim.
Ruling in Rolah’s favour, Justice Geoffrey Eames had harsh words for British American Tobacco Australia Services (the Australian arm of the tobacco giant) and its lawyers Clayton Utz.
He found that 'the process of discovery in this case was subverted by the defendant and its solicitors ... with the deliberate intention of denying a fair trial to the plaintiff, and the strategy to achieve that outcome was successful.'
The tobacco giant, according to Justice Eames, had subverted the process of discovery by destroying thousands of documents to keep them from prospective plaintiffs such as Rolah, and misled the court about what had become of those documents.
Success, but not for long
Justice Eames sent the landmark case to trial before a jury solely to decide on the amount of damages. Rolah was awarded $700,000.
The victory was short-lived. British American Tobacco appealed Justice Eames' decision, and the Victorian Court of Appeal unanimously upheld the move. The Court of Appeal overturned Justice Eames' findings, accepting an 'innocent' explanation as to how Clayton Utz’s ‘housekeeping’ might have destroyed crucial paperwork. It also set aside the damages.
The case was sent back to trial, but Rolah McCabe died, aged 52, before a decision could be handed down. Against all odds, Rolah’s daughter Roxanne Cowell vowed to fight on in her mother’s name.
Twists and turns
Just when all seemed lost, Slater and Gordon got a call from a disgruntled former BAT lawyer and executive, Frank Gulson. Outraged at what he felt was a misrepresentation of his views lodged in court submissions by BAT, Gulson was prepared to discuss details of BAT’s ‘document retention policy’. With a little gentle encouragement, Slater and Gordon had their whistle-blower.
With an affidavit from Gulson accusing BAT of tampering with potentially damaging documents, Slater and Gordon now had strong evidence to support Justice Eames’ decision against BAT. But despite the explosive revelations from the BAT insider, the High Court refused to examine new evidence.
Then in August 2006 the saga took another twist. The McCabes’ former barrister Jack Rush, QC, was told by a former Clayton Utz solicitor of an internal investigation into the firm’s own BAT lawyers. That review found that documents had been inappropriately destroyed. It also found that one partner gave evidence that was 'potentially perjurious', while another ‘improperly frustrated the discovery process’.
Jack Rush said bringing Clayton Utz to court over these contentious documents was of ‘utmost importance to the administration of justice and also to the ethics and conduct of the legal profession'.
In a criminal investigation by the Victorian Director of Public Prosecutions it was revealed that the tobacco giant and its lawyers did away with ‘everything that was damaging in a way that would not rebound on the company or the British American Tobacco group as a whole.’ This included incriminating documents detailing BAT's knowledge of the health risks of smoking.
In October 2006, Melbourne’s Sunday Age and Age published detailed findings of the Clayton Utz investigation. The newspaper revelations sparked another round of litigation, and a change in venue. In the Supreme Court of NSW, BAT rushed to stop Fairfax Media from publishing more details of the incriminating investigation.
While an interim injunction was granted, proceedings were also commenced against Slater and Gordon. Undertakings were sought from all parties that the Clayton Utz review not be made public.
Barrister and former Federal Court judge Ron Merkel appeared for Slater and Gordon, stating that 'tobacco companies need to maintain concealment through claims of legal professional privilege, for the purposes or frustrating the process of law itself''. Before the year was out, Fairfax Media had settled with BAT.
Warning hits home
In 2010, there came a new low. Rolah’s son Jamie received a letter from BAT’s latest lawyers, Corrs Chambers Westgarth. It warned that the McCabes’ Melbourne home could be sold to cover the company's legal costs. The McCabes saw the letter as a fresh attempt to get them to abandon their legal quest.
Simon Chapman, an anti-tobacco campaigner and the University of Sydney’s professor of public health, said the threat to claim and sell Mr McCabe's house was unfair, but unsurprising. 'Tactics like this, wheeling in the heavy legal artillery, are designed to send the message that you take on Big Tobacco at your peril,’ he said.
'They are trying to scare us,’ said Jamie. ‘But we are not prepared to let go. Mum wasn't prepared to give up her fight eight years ago and neither are we.'
A legal source close to the case said: 'A multibillion-dollar company does not need a few thousand from a suburban house. They are doing this to intimidate the McCabes.'
Settlement in sight
Back in the Victorian Supreme Court, new hope of a settlement was raised by Justice Stephen Kaye, who called for a trial and ordered discovery, including discovery of Clayton Utz's documents. With the professional conduct of its lawyers laid bare, it was now up to BAT to get its own house in order.
In March 2011, after years of bickering over legal procedure and ethics, the case of McCabe v Big Tobacco was finally settled. Due to confidentiality clauses, neither side claimed victory as they left the Victorian Supreme Court. The tobacco giant claimed all parties ‘walked away.’ But as they smiled and thanked their legal team, it could be assumed that the McCabes were walking away a lot happier.
Though the details remained secret, the toll for BAT was massive. The company's legal bills alone were estimated at more than $10 million, and Arnold Bloch Liebler, the firm that stepped in to represent the McCabes pro bono from 2006, accumulated $3.5 million of its own costs.
As part of the settlement, actions brought against Slater and Gordon were dropped, and all documents obtained by Slater and Gordon were to be destroyed – including those from the Clayton Utz internal review.
This landmark case continues to resonate far and wide. The US Department of Justice used whistle-blower Frank Gulson as a star witness to launch a multi-billion-dollar anti-racketeering lawsuit against the American tobacco industry. In Victoria, the case has also led to a range of law reforms regarding document destruction.
Lawyer and journalist Richard Ackland summarised the case’s significance this way: ‘Occasionally, just occasionally, the media can play a positive part in righting a wrong.'
‘It did in this case, largely thanks to The Age and The Sunday Age. The case might also give hope to young lawyers that there is a world beyond the pain of commercial law and that great public law issues allow the possibility of a more creative life.’
The contents of this blog post are considered accurate as at the date of publication. However the applicable laws may be subject to change, thereby affecting the accuracy of the article. The information contained in this blog post is of a general nature only and is not specific to anyone’s personal circumstances. Please seek legal advice before acting on any of the information contained in this post.