McCabe litigation took 10 years in two states
Saturday, April 2, 2011
Justinian in Court in the Act, Tobacco litigation

Richard Ackland recalls the torturous trail of the McCabe litigation ... Clayton Utz in the frame ... Settlement soon after retrial and discovery ordered by VicSupremo Stephen Kaye

Rolah McCabe: "iniquity' infected her caseA 10-year battle in the tobacco wars ground to an exhausted end on Thursday. The Rolah McCabe personal injuries case against British American Tobacco in Australia was settled on confidential terms and, judging by the body language of the McCabe family, they were quite delighted by the outcome.

After a verdict in her favour by the Victorian Supreme Court in April 2002, which awarded damages of close to $700,000, Rolah McCabe died of lung cancer brought on by a long addiction to BAT's products.

The trial judge, Justice Geoffrey Eames, had made some bold decisions. He struck out the tobacco company's defence, finding that it had failed to comply with his orders for discovery and it had conducted a policy of document destruction.

Further, he said BAT's legal firm, Clayton Utz, had been one of the main architects of advice to destroy incriminating documents, and this was done under the Orwellian ''document retention policy''.

Naturally, BAT and Clayton Utz were not going to take that sort of finding lying down and the case moved to the Victorian Court of Appeal, which overturned Eames's findings, set aside the damages and ordered a new trial.

One element of the appeal judges' reasoning was that in circumstances where there was no formal commencement of proceedings it was not improper to destroy documents. However, there must nonetheless have been an expectation that other cases against BAT could soon commence in Australia.

The case was now conducted in the name of Rolah McCabe's daughter, Roxanne Cowell. The High Court refused her special leave to appeal.

In August 2006 there was a dramatic development. The solicitor Christopher Dale told Jack Rush, QC, counsel for McCabe at the trial, he had reports of an investigation by Clayton Utz of its lawyers who worked on BAT's defence.

Dale had been a partner of Clayton Utz and a member of the committee that did the inquiry.

The review found that to keep material out of the hands of the plaintiff, documents had been improperly destroyed. There were findings against two partners of the firm. One was said to have given evidence that was ''potentially perjurious'' and another had improperly frustrated the discovery process. Both have since left Clayton Utz.

After the settlement: Leon Zwier with Jamie McCabe, his girlgriend Erin Charles and Peter Gordon (right)

In late October 2006 articles detailing the findings of Clayton Utz's investigation found their way into The Sunday Age and The Age.

This fired off another frantic round of litigation and the action moved to the Supreme Court of NSW, where BAT sought to stop Fairfax newspapers publishing more of the incriminating material.

Justice Paul Brereton granted an interim injunction. Proceedings were also commenced against Peter Gordon and Slater & Gordon, solicitors for McCabe. Undertakings were sought from everyone, including Dale, that the internal review not be disseminated or published.

Later it was found that Brereton had acted as a barrister for one of the BAT companies in earlier proceedings that sought to prevent a former tobacco lawyer giving evidence against the company.

This set off applications for Brereton to disqualify himself, yet he clung onto it for almost three more months.

Ron Merkel appeared for Slater & Gordon and submitted that ''tobacco companies need to maintain concealment through claims of legal professional privilege - for the purposes or frustrating the process of law itself''. By November 2006 Fairfax and The Age settled with BAT.

The following February Brereton disqualified himself from hearing the injunction against Peter Gordon and others. He sent the whole thing back to Melbourne, where it knocked around the Victorian Supreme Court until Thursday.

What the McCabe estate sought from the court were orders that Clayton Utz's internal review showed an ''iniquity'' in the way the appeal was conducted and that iniquity should defeat BAT's claim that the documents were privileged and should not be used to reopen the case.

By this stage Leon Zwier, from Arnold Bloch Leibler in Melbourne, had taken over the estate's case and for the past four years ran it pro bono.

Enormous pressure had also been building, with BAT seeking costs against the estate of about $2 million. However, ultimately the catalyst for settlement was the arrival of Justice Stephen Kaye.

After years of legal bickering about form and procedure and documents he said a trial should take place and ordered discovery, including discovery of Clayton Utz's documents.

The heat was back on the tobacco defendants. There was a good deal of unfortunate conduct by their lawyers that would not play well at a trial.

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.

From The Sydney Morning Herald, News Review, April 2, 2011

Article originally appeared on Justinian: Australian legal magazine. News on lawyers and the law (http://justinian.com.au/).
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