Ruling set to batter BAT shares
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Your support makes all the difference.Shares in BAT Industries are expected to open sharply lower this morning after a Florida jury awarded pounds 500,000 to a man who developed lung cancer from smoking cigarettes for 44 years.
Tobbaco shares plunged by up to 13 per cent on Wall Street after the verdict was returned on Friday against Brown and Williamson, the manufacturers of Lucky Strikes whose parent company is BAT.
Although BAT did not fall by as much as rival cigarette groups Philip Morris or RJR, analysts fear that as much as pounds 1.5bn could be wiped off its value when trading begins in London today.
At Friday's close BAT was capitalised at pounds 15.8bn but a fall of anything like that seen in New York would remove it from the top 10 of Britain's biggest quoted companies.
In a legal judgment with potentially disastrous consequences for the tobacco industry, a Florida jury found after two days of deliberations that the cigarettes Grady Carter, 66, smoked were a "defective" product and that the makers had shown negligence in not alerting smokers to how dangerous they were.
A lawyer for the plaintiff said her firm alone had "hundreds" of similar cases pending, most of them based on the argument that tobacco companies had failed adequately to warn smokers of the addictiveness of cigarettes.
Cigarette makers, who proudly boast of never having had to pay a penny in damages in similar cases going back 40 years, insist the latest ruling is flawed and will be overturned in an appeal court. The closest the tobacco industry came to paying out was in 1988 when a New Jersey court awarded damages of $400,000 to a long-time smoker.
But an appeal court later overturned the decision.
In May, a landmark ruling sent shares in BAT soaring after a US federal appeals court dismissed a class action lawsuit which could have resulted in millions of smokers suing cigarette companies.
The court ruled that smokers could only sue cigarette companies on an individual basis.
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