British American Tobacco lawyers are planning to appeal against what the company called "vile" findings against it - particularly in relation to its systematic shredding of legally sensitive documents - contained in a 1,700-page judicial opinion delivered at the end of one of the largest civil trials ever heard in the US.
Management at BAT, one of five tobacco majors against which a racketeering claim was pursued in the US, is understood to be furious at some of Judge Gladys Kessler's views, published last week. They include her opinion about the firm's worldwide attempts to shred or hide sensitive documents, which could be helpful to dying smokers looking to sue.
Judge Kessler said: "Members of BAT group ... destroyed documents, routed them from one country or BAT facility to another, erased a useful litigation database as well as the fact that documents it contained had ever existed, as soon as the pre-existing judicial hold was lifted, and constantly exhorted their many employees to avoid putting anything in writing.
"All these activities were taken for one overriding purpose: to prevent disclosure of evidence in litigation."
A BAT spokesman said: "This is one judge in one court and undoubtedly it will end up on appeal."
BAT's worldwide document destruction policy came to light accidentally during a case in Australia brought four years ago by a dying smoker, Rolah McCabe, who contracted lung cancer after almost 40 years of smoking cigarettes made by BAT companies.
A critical memo written in 1990 by Andrew Foyle, then a partner at the London law firm Lovells and an adviser to BAT, was ordered to be disclosed during the trial. It revealed elements of BAT's internationally coordinated document management policy. The judge ruled that BAT's Australian subsidiary had "deliberately obliterated" documents, depriving Ms McCabe of the right to a fair trial.
BAT successfully appealed the ruling, and the Australian appeal court agreed the trial judge had mistakenly read something "sinister" into the Foyle memo, which should never have been disclosed to Ms McCabe's lawyers. The court also overturned a A$750,000 (£285,000) damages award to Ms McCabe.
Despite this reversal, the veil had been briefly lifted on BAT's systematic document destruction policy, attracting the attention of US justice department attorneys, who picked up where Ms McCabe's lawyers left off. They gathered evidence from around the world, including testimony from BAT's top internal lawyer, Nick Cannar, responsible for document management worldwide. Fred Gulson, an in-house lawyer at BAT's Australian subsidiary, Wills, turned whistleblower after Ms McCabe died. Travelling to the US to give evidence, he told the court that documents had been destroyed "due to litigation concerns".
He said: "The purpose of [Wills'] document retention policy [DRP] was twofold: to protect the litigation position of Wills, and to protect the litigation positions of other BAT group companies, especially our US affiliate, B&W [BAT's US division, Brown & Williamson, which has since been demerged], by ensuring that potentially damaging documents would not be discovered from Australia.
"While it was important that the DRP appear to be a rote housekeeping measure, of the kind that would normally be run by an audit or accounting department, the purpose ... was to protect Wills and BAT from litigation ... it was actually a document destruction policy."
He told the court his recollection of BAT's document retention policy came not from a written document but from explanations provided by Mr Cannar, Mr Foyle and others. Lovells said: "Foyle was not accused of any personal misconduct or impropriety of any kind."
Judge Kessler's judicial opinion also found training practices at B&W had encouraged staff to use oral rather than written communications. One internal manual advised: "Imagine the memo, note or letter you are about to write will be seen by the person that you would least like to read it ... send a 'mental copy' to a newspaper, one of your competitors, a government agency or a potential plaintiff. Now: would you still write the memo?"
The case against the tobacco firms Philip Morris, RJ Reynolds, Brown & Williamson, Lorriard Tobacco and BAT started out, under the Clinton administration, as a $290bn (£180bn) lawsuit to recoup healthcare costs. But by the time Judge Gladys Kessler gave her ruling last week the US court of appeals had in effect neutered the claim, ruling the justice department could not pursue past profits.
The 29-week trial ended in a pyrrhic victory for the justice department after the judge ruled that tobacco majors had violated US racketeering laws, first used against the mafia. The firms published "corrective statements" - a penalty so light that tobacco shares rose.