US Queries BAT Shredding

British American Tobacco's decision to destroy thousands of documents in Australia on the health risks of smoking has attracted the interest of the US department of justice, which has asked to see evidence of the company's destruction programme.

Washington law enforcers have written to lawyers representing Rolah McCabe, a 51-year-old Australian woman who won a landmark legal battle against BAT earlier this month.

They want to examine whether BAT has embarked on a worldwide programme of pulping potentially embarassing material in an attempt to influence courtroom battles with terminally ill smokers. Ms McCabe, who developed lung cancer after smoking cigarettes for 40 years, won A$700,000 (£260,000) damages after claiming that BAT had supressed information on the dangers of tobacco.

A judge in Victoria threw out BAT's defence, saying the company's "deliberate obliteration" of internal records had prejudiced proceedings.

The US government's approach, to law firm Slater and Gordon, lent weight to anti-smoking campaigners' predictions that the shredding scandal could trigger a "litigation armageddon" around the world.

BAT has admitted that its London head office knew of the shredding programme, which encompassed much of its Australian marketing material between 1955 and 1987 and every document, CD-Rom and disk predating 1998 on the chemical effects of nicotine.

BAT maintains that the destruction of documents was part of a "routine housekeeping" exercise. It says that at the time its staff shredded the material, BAT had won two cases brought by Australian smokers and anticipated no further action in the country.

The company says its Australian subsidiary acted in accordance with its "document retention policy", which sets global guidelines on how long employees should safeguard records.

Among those criticised by the judge for destroying documents was Nick Cannar, BAT's former chief counsel in Australia, who is now managing director of Imperial Tobacco's Australian subsidiary.

The ruling also implicated Andrew Foyle, a senior London-based partner at law firm Lovells, who gave BAT advice on its "retention policy". A spokeswoman for Lovells declined to comment yesterday, citing client confidentiality.

BAT, which owns brands including Lucky Strike, Kent and Dunhill, faces more than 600 claims for damages in the US.

The company intends to appeal against the Australian ruling, which was its first significant defeat outside America. Lawyers in Victoria expect the appeal to be heard on May 3.