The McCabe verdict reveals problems at the heart of our legal system

When, in the early 1950s, the tobacco industry knew that its products caused cancer, and, by the early 1960s, that the nicotine they contained was addictive, they had an important choice to make. On the one hand, they could come clean, tell the world what they knew about their products, and, in an orderly way, take them off the market. Or, they could deny deny deny, mass market to sell as many as possible, devote untold resources to figuring out how best to capitalise on the extraordinary addictiveness of nicotine by turning cigarettes into sophisticated drug delivery devices, and do everything they could to make as much money as possible from a product that would kill about half of its long-term users. History records which option they took. And it records the result of that choice. In Australia alone, over 700,000 people have died since 1950 as a result of tobacco-related disease; currently about 19,000 a year.

This could only ever have been a holding strategy, however. It could never last forever. In the US, that holding strategy has fallen like a house of cards over the last five years, as jury after jury has been shown previously secret tobacco industry documents that tell a story of corporate fraud of extraordinary proportions, and these juries have punished the industry in record amounts. In Australia, the holding strategy will stay in place just a little bit longer after the Victorian Court of Appeal overturned a decision of Justice Geoffrey Eames striking out the defence of British American Tobacco in a case brought against it by Rolah McCabe, who died of lung cancer in October this year. Justice Eames had struck out BAT's defence largely on the basis that it had deliberately destroyed thousands of documents so as to prevent them being used against the company in cases like that brought by Mrs McCabe.

BAT did not deny wholesale destruction of documents, though it denied any illegitimate purpose. After a 16 day hearing, Justice Eames had no doubt what the true purpose was - to keep damaging documents out of Court. The Court of Appeal disagreed. It found BAT's policy to be legitimate. To destroy documents to avoid the inconvenience and cost of having to give discovery of them in litigation was, to the Court, quite different from destroying them to prevent them being used against the company in Court. So, said the Court, it was hardly surprising that not only were documents destroyed, but so, too, were electronic copies, and all records of what had been destroyed. In respect of a CD ROM, on which some 30,000 documents were imaged, said the Court, "it was surely not surprising that [BAT] was at pains to destroy also the computer imaging of the documents being destroyed".

It is scandalous, if no longer remarkable, that lawyers and their corporate clients routinely use careful and clever language, and draw sophistic intellectual distinctions, that mask the reality and consequences of what they are doing. What is much more frightening, however, is when Courts of Appeal stand up to cheer them for doing so. The fact that BAT had succeeded in obliterating the historical record that would have shown Australian courts what US juries have seen was irrelevant. What was more important was their "reasons" for destroying the documents - such as the burden of having to keep them, and then to have to produce them when the expected litigation materialises.

Just how much has always been at stake for companies like BAT, and how much incentive they have had to destroy damaging documents, was well summed up by Ernest Pepples, a lawyer for BAT's US affiliate, Brown & Williamson, in the early 1980s: "If we admit that smoking is harmful to heavy smokers, do we not admit that BAT has killed a lot of people each year for a very long time? Moreover, if the evidence we have today is not significantly different from the evidence we had five years ago, might it not be argued that we have been 'wilfully' killing our customers for this long period? Aside from the catastrophic civil damage and governmental regulation which would flow from such an admission, I foresee serious criminal liability problems." Indeed.

The Court of Appeal's decision will undoubtedly be appealed to the High Court. This country's highest court will have to examine issues that go to the very heart of our legal and justice system. If the Court of Appeal's decision stands, the only winners will be big corporations with much to hide, their $500-an-hour lawyers who give clever advice with no regard whatsoever for its real-life consequences, and businesses that make industrial-size shredders, the most efficient machines known to man for obliterating from the historical record that which a corporation never wants the world to see.