Corporate Counsel has reported on the testimony of a retired
Imperial Tobacco General Counsel in the class actions relating to addiction and
lung disease being heard in Montreal court. The Corporate Counsel article can
be read here or can be read below. At
issue is his part in decisions taken in the early 1990s to destroy company documents
on the risks of smoking. Susan Hackett (former
General Counsel for the Association of Corporate Counsel) and I were interviewed
on corporate governance principles surrounding records management and the legal
ethics relating to document destruction while litigation is in course or
reasonably expected. I certainly agree
that back in the 1990s records management as an area of corporate governance
was not as mature as it is today but the ethical principles remain unchanged.
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Corporate Counsel
Ex-Imperial Tobacco GC Questioned Over Destroying Health
Documents
By Sue Reisinger
April 6, 2012
Over the course of three long days, Roger Ackman, Imperial Tobacco's
general counsel from 1972 to 1999, sat in the hot seat where no GC ever wants to
be—as a trial witness being grilled by a plaintiffs lawyer over destroying
company documents.
Ackman was dragged into a suit against the tobacco industry in Superior
Court in Montreal—against his protests and despite failed legal attempts to
avoid it. But because the GC actually took part in decisions in the early 1990s
to destroy company research reports on the risks of smoking, the Canadian court
ruled he had to testify.
Ackman has insisted that neither he nor his former company did anything
wrong in destroying the files or in selling tobacco, which is a legal product.
If anyone is to blame, the company said, it would be the Canadian government for
not regulating the sale of the product (and in fact the government has been
added as a third party in the case).
As for the shredded documents, Ackman’s company has said they were only
copies, and the original reports remain available at the parent company’s
offices.
Plaintiffs lawyers nevertheless tried to paint the document destruction as
a nefarious act, and on day three they directly questioned Ackman’s ethics. In
response, Ackman testified that he wasn’t aware of any ethical rule prohibiting
lawyers from helping to destroy company documents.
But in general, there is. George Bass, general counsel at Wawanesa Mutual
Insurance Company in Winnipeg, Canada, said his country has guidelines saying if
one is in the process of litigation, or expects to be, it is unethical to
destroy documents that would be relevant.
“There’s been a lot done in corporate governance in recent years around
records management,” Bass explained. “Certainly it is acceptable for
corporations to dispose of documents when done in a systematic way” under a
document retention policy.
When exactly Imperial instituted its document retention policy has been at
issue in the trial.
Susan Hackett, CEO of the consulting firm Legal Executive Leadership,
agreed with Bass. “A red flag goes up if you have a litigation hold, and if the
destruction is outside the norm of the company’s retention policy,” Hackett
said.
But Hackett noted that Ackman’s conduct took place some 20 years ago. “And
it’s not fair to hold him to today’s standards,” primarily instituted after the
Enron Corp. scandal of 2001, she said.
Still, Ackman’s combative testimony has made him the center of
north-of-the-border media attention during the $27 billion class action trial
against the cigarette industry. It is the largest class action in Canada’s
history.
The trial involves two separate class actions, both filed 13 years ago; one
concerns addiction, and the other lung disease. The defendants are the Canadian
operations of the world’s largest tobacco companies: Rothmans, Benson &
Hedges Inc. (wholly owned by Philip Morris International); Imperial Tobacco
Canada (wholly owned by British American Tobacco plc); and JTI-Macdonald Corp
(wholly owned by Japan Tobacco Inc.).
A tobacco litigation blog called Eye on the Trials has closely followed the
13 days of the trial so far, and Ackman’s testimony in particular.
All three days of his testimony focused on the issue of document
destruction. There was no testimony on Thursday while the court dealt with
procedural matters.
Plaintiffs lawyer Gordon Kugler, a senior partner at Kugler Kandestin in
Montreal, first called Ackman to testify on Monday. The blog colorfully painted
the scene: “Finally, Mr. Ackman, 73, took the stand, his hair neatly combed, his
suit reminiscent of Dustin Hoffman's in Death of a Salesman.”
When a defense attorney objected to a Kugler question, Justice Brian
Riordan dismissed the objection, calling Ackman part of the “spirit and brain”
of the company. At one point the judge also reminded Ackman that “witnesses were
there to answer questions, not to ask them,” the blog states.
On Tuesday, Ackman again played lawyer and objected to the judge about
certain questions he was being asked about the studies, saying he wasn’t a
scientist. The defense team quickly echoed his concerns.
As part of his testimony, Ackman said he hired Montreal lawyer Simon Potter
“to help him” with his handling of the research documents. Potter, of the law
firm McCarthy Tétrault, is slated to testify in the trial, even though he is
also the defense attorney for Rothmans, Benson & Hedges in the case.
Ackman testified that the parent company pressured Imperial to destroy the
research documents, though he couldn’t recall why, according to the blog. He
also couldn’t recall why lawyers instead of researchers decided which documents
to destroy.
The documents have been subpoenaed in this case, and some have been posted
to the plaintiffs’ website.
