66 66 Conference of the Parties to the WHO Framework Convention on Tobacco Control Seventh session Delhi, India, 7 12 November 2016 Provisional agenda item 5.7 FCTC/COP/7/13 14 June 2016 Implementation of Article 19 of the WHO FCTC: Liability Report by the expert group INTRODUCTION 1. At its sixth session (Moscow, Russia, 13 18 October 2014), the Conference of the Parties (COP) decided to extend the mandate of the expert group on liability in relation to the implementation of Article 19 of the WHO Framework Convention on Tobacco Control (WHO FCTC) 1. The COP directed the expert group to provide a final report on approaches that may assist Parties to strengthen civil liability mechanisms across a variety of legal systems and to report on progress made in the other areas of its mandate. 2. The COP also requested the Convention Secretariat to: a) develop a database of public institutions and legal and scientific experts, nominated by Parties, with experience in tobacco litigation related to liability, and establish a mechanism for the recommendation of experts, at the request of Parties, engaged in relevant actions; and b) prepare, maintain and make available to Parties a comprehensive list of the existing resources that may assist Parties in dealing with civil and criminal liability and other legal challenges where necessary. 3. Further, it invited Parties to share, through the Convention Secretariat s information platform, relevant information regarding implementation of Article 19 as well as experience with issues related to tobacco liability and expertise. While the expert group remains conscious that all areas of civil and criminal liability require specific attention and work, given the time constraints and the prioritization by the COP of approaches that may assist Parties to strengthen civil liability mechanisms, the expert group focused on this area. Appointment and meeting of the expert group 4. In accordance with decision FCTC/COP6(7) and under the direction of the Bureau of the COP, with the aim of ensuring balanced representation from developing countries and countries with economies in transition, the Convention Secretariat invited three experts per WHO region, and two observers per WHO region with specific expertise in the area of liability, to join the expert group. 1 See decision FCTC/COP6(7).
5. The expert group held one meeting (Geneva, Switzerland, 19 21 April 2016). The meeting was attended by 11 experts nominated by governments and three observers. Aside from the meeting, the expert group also made maximum practical use of electronic communications and other methods to minimize expenditure. Method of the work of the expert group 6. Mindful that the COP requested a final report on civil liability and further progress on other areas of its mandate, the expert group, based on an analysis of best practices, obstacles and available options contained in its previous report FCTC/COP/6/8, considered that its mandate would best be fulfilled by providing specific approaches to Parties through the design of a practical toolkit. The expert group reviewed the options and best practices in FCTC/COP/6/8 and concluded that, in light of current experience in the field of tobacco-related litigation, they remain the most viable approaches to improving civil liability mechanisms. Thus, the work of this group was to design a method of implementation of those approaches. 7. Substantive legal information upon which the toolkit is based is contained in document FCTC/COP/6/8 and prior studies carried out by the Secretariat under the mandate of the COP 2. The purpose of the toolkit is to present this information in a form that is easily accessible by Parties when considering options related to liability. Mindful that the toolkit is a living document that will continually evolve as legal practice develops, the expert group envisages that it will be capable of being updated with contemporary information, for example, as Parties may share information pursuant to the mandate 3. Further, the expert group envisages the toolkit as an online resource available to Parties through the WHO FCTC Information Platform. 8. The design and approach of the toolkit envisaged by the expert group has two main parts. The first part of the toolkit consists of three scenarios through which Parties might wish to use their civil liability mechanisms to hold the industry to account, and that are presented here in the form of diagrams and key questions to be asked as well as litigation and reform options that might be chosen on that basis. The second part consists of an index of procedural reforms common to all scenarios identified in this report, which might strengthen civil liability mechanisms based on best practices from around the world. The toolkit is intended to guide Parties to the specific information that they may be seeking, which is contained in the expert group s report to COP6 and other resources 4. As a future development, the toolkit will contain electronic links to specific sources of assistance available to Parties including technical support, information gathered in accordance with Article 21, international cooperation in accordance with Article 22, and experiences collected over time by the Convention Secretariat 5. Common benefits and challenges in the implementation of Article 19 9. The overarching common benefit of providing tools for the implementation of Article 19 is that it presents Parties with the opportunity to avail themselves of effective means to hold the tobacco industry liable for its abuses. Tobacco is distinct in that the marketing of an inherently deadly and addictive product promoted as a consumer good lacks historical parallel. As a result, actions taken to 2 See e.g., Implementation of Article 19 of the Convention: Liability, Report of the expert group FCTC/COP6/8, 2014 (Report of the expert group established by COP 5); FCTC/COP4/13, 2010 (Note by the Secretariat to COP 4); and FCTC/COP5/11, 2012 (Report by the Secretariat to a request by COP 4). 3 Other examples may include information shared pursuant to Articles 20, 21 and 22 of WHO FCTC. 4 See e.g., Annexes 1-3 of FCTC/COP/6/8. A list of the resources on the scenarios, including the Consolidated review of best practices and obstacles to establishing civil liability, and options for reform, as well as links to specific sources of assistance available to Parties will be available on the Convention Secretariat website as established in FCTC/COP6(7). 5 This list is not meant to be exhaustive. 2
address the harm caused by this industry s products and practices are often without precedent and legal systems may need to adapt in order to enable tobacco industry liability to be pursued. As such, this toolkit aims to give Parties a way to analyze their existing substantive and procedural legal rules by considering which scenario and related reform options are compatible with their existing legal framework and choosing the measures most appropriate for strengthening their implementation of Article 19. 10. Implementing Article 19 also presents many other benefits, including but not limited to: enforcing existing tobacco control laws and other related legal measures; strengthening the position of victims of tobacco in relation to the producers; raising the price of tobacco products (which reduces consumption) and providing necessary funds for tobacco control; exposing internal industry documents, which provide invaluable insights into the industry s tactics, providing for more successful legislation and litigation. 11. The expert group also identified a number of reasons why Parties, individuals and groups have found it challenging to both bring claims against the tobacco industry to court and win them. Examples of obstacles to successful tobacco litigation have a number of common features, many of which can arise irrespective of the merits of the case, whether those pursuing the claim deserve redress, or whether the tobacco industry has committed any unlawful acts in the manufacture, supply and marketing of tobacco products. 12. Focusing particularly on civil liability as provided by the COP decision, these common features include: resource imbalances, which are exacerbated by the high costs and long time frames for litigation; the industry s abuse of legal procedures, which delay proceedings and divert attention from the merits of the claim; difficulties in obtaining and using evidence, especially internal tobacco industry documents; technical obstacles to pursuing claims such as limitation periods; a lack of clear liability standards applicable to the manufacture, supply, and marketing of a deadly and addictive product subject to ongoing regulation; mistaken beliefs that the public was fully aware of the harmful consequences of tobacco products decades before they were publicly admitted by the industry, and that children and adolescents cannot fully appreciate the harmful consequences of tobacco products before they begin tobacco use; and a a reluctance among judicial bodies to admit and/or allow parties to rely on evidence of the population level medical, sociological and econometric effects of tobacco marketing on smoking behavior, and the medical and social consequences of tobacco use, to establish causation. In response, this toolkit presents multiple ways Parties can address and overcome challenges by considering measures that are compatible with their jurisdictions and choosing those measures that best strengthen their civil liability mechanisms. CIVIL LIABILITY TOOLKIT PART 1: SCENARIOS FOR STRENGTHENING IMPLEMENTATION OF ARTICLE 19 13. The expert group identified three scenarios through which Parties might wish to use, or strengthen, their civil liability mechanisms to hold the industry to account, as part of their implementation of Article 19: (a) Facilitating access to justice for victims of smoking-related disease (on both a collective and individual basis); (b) Healthcare cost recovery; and (c) Enforcing existing tobacco control measures or general laws relevant to tobacco, including injunctive relief. 14. It is important to note that some aspects of the scenarios may be more appropriate/feasible in some jurisdictions according to their own legal systems and traditions, and the resources available to the Parties in their implementation of Article 19. 3
Scenario 1: Facilitating access to justice for victims of smoking-related disease 15. Access to justice for victims of smoking-related disease would require that claims are decided on their merits within a reasonable time and at proportionate cost, and that the tobacco industry has to legally justify its responses to the epidemic its products cause. In light of the historical experiences in tobacco litigation (as documented in FCTC/COP/6/8), delivering this objective requires a fundamental correcting of the imbalance between claimants and the tobacco industry, particularly given the resource asymmetry and the systematic abuse of legal procedure by the industry. This objective can be pursued on a collective or an individual basis. If a Party is considering options to facilitate access to justice on a collective basis, the following questions should be considered: Facilitating access to justice on a collective basis 2. If yes, are eligibility rules (certification) broad enough to include tobacco-related claims? 3. If yes, do procedures allow for establishing causation on aggregate/ statistical basis? 6. If no or law is unclear, consider amending law clarifying certification rules. 4. If yes, does the legal system have procedural rules to ensure the claim is decided on the merits, within a reasonable time and at proportionate cost? 5. If no, does the procedure allow proof of causation and damage in individual 'follow on' trials after determination of industry liability on 'common issues'? 1. Does the Party have a class action procedure? 7. If no, consider class action reform. Alternatively, does the jurisdiction allow for claims to be joined? 8. If yes, does the legal system have appropriate cost and funding, and procedural rules to enable litigation to be decided on the merits,within a reasonable time and at proportionate cost? 9. If no, main option is to facilitate access to justice of individual claims. (See diagram below) Facilitating access to justice on an individual basis 16. If a Party is considering options to facilitate access to justice for victims of smoking-related disease on an individual basis (individual claims), the following questions should be considered: 1. Does the law have clear liability standards for tobacco industry conduct? See INDEX OF PROCEDURAL REFORMS 2. Does the law limit consent defences where industry defendants deny the risk? 6. Procedural: Does the legal system have procedural rules to ensure the claim is decided on the merits, within a reasonable time and at proportionate cost, including the fast tracking of claims where a victim's health is deteriorating? 3. Does the law allow claimants to extend limitation periods? 5. Does the law allow claimants who cannot establish which of several defendants caused their injury to recover against any one of them? 4. Does the law allow claimants to prove causation solely on the basis of statistical evidence? 4
Scenario 2: Healthcare cost recovery 17. Healthcare recovery claims allow healthcare providers to recover costs of care for tobacco-related harm 6. If a Party is considering healthcare cost recovery litigation, the following threshold questions should be considered: 4. Confers causes of action on State healthcare providers and private insurers/providers? 5. Allows causation and damage to be established using statistical and sociological evidence, without reference to individual patients? 3. If yes, does the law have the following features: 6. Defines the tobacco-related wrongs that are covered by the law? 2. If yes, is there a statutory law governing tobacco-related health costs? 1. Are laws in place that would facilitate healthcare cost recovery litigation? 11. If no, can healthcare providers bring claim under exisiting legal rights? 10. If no, is the existing legal framework broad enough to recover costs from tobacco companies? 13. If no, consider adopting enabling legislation with the features listed in boxes 4-7. 7. Provides for joint and several liability and apportion liability between defendants on the basis of market share. 8. If yes to all of the above, does the legal system have rules to ensure the claim is decided on the merits, within a reasonable time and at proportionate cost? 12. If yes, consider bringing the claim under rights of subrogation. Scenario 3: Enforcing existing tobacco control measures or general laws relevant to tobacco, including injunctive relief. 18. If a Party is considering measures to improve the enforcement of existing tobacco control measures or relevant general laws that impose civil and criminal liability, the following threshold questions should be considered: 1. Do tobacco control or relevant general laws include enforcement mechanisms? 2. If yes, does the legal system allow anyone to bring claims to enforce tobacco control laws or relevant general rules? 7. If no, amend laws to include enforcement mechanisms, including proportionate sanctions.* 3. If yes, does the law have appropriate procedural and evidentiary rules to ensure alleged breach is decided on the merits? 6. If no, consider amending standing rules to authorize persons and/or organizations to bring enforcement proceedings. 5. If no, consider amending procedural rules as set out in the following Index. 4. If yes, does the law offer protection for claimants from the cost risks of litigation as well as provide incentives for enforcing claims? *Proportionate sanctions take into account the gains made by the industry by breaching the relevant legal obligation. PART 2: INDEX OF PROCEDURAL REFORMS RELEVANT TO ALL CIVIL CLAIMS (SCENARIOS) 19. In its previous report to COP6, the expert group identified procedural reforms relevant to all civil claims that Parties might wish to use in order to strengthen their civil liability mechanisms as part of 6 Other damages or remedies may be available. 5
their implementation of Article 19. As such, this section serves to assist Parties as a quick reference to the range of reforms available based on best practices from around the world that encourage holding the industry to account. Regardless of whichever scenario a Party is considering, it is necessary to ensure a Party s legal system is accessible to claimants so that it delivers judgments on the merits, within a reasonable time and at proportionate cost 7. Reforms related to the proof (merits) of claims 20. Adopt rules that facilitate access to, and admissibility of, tobacco industry documents in court proceedings by: (a) introducing broad disclosure and discovery rules, requiring industry defendants to disclose internal documents; (b) relaxing hearsay rules with respect to documentary evidence and rules relating to proof of the authenticity of internal industry documents obtained from tobacco litigation document depositories; (c) abrogating legal professional privilege for communications with in-house counsel, preventing industry defendants from withholding internal documentation and communications, and strengthening rules that prevent privilege claims over communications for fraudulent and iniquitous purposes; and (d) introducing appropriate sanctions and remedies for destruction of documents, giving courts the power to remedy unfairness caused by such destruction by industry defendants. 21. Adopt rules of evidence and preclusion that allow claimants to rely on findings made, or evidence given, in previous tobacco cases including in other jurisdictions. Reforms related to the cost of claims 22. Introduce funding rules that ensure reasonable and predictable costs that do not act as a deterrent to meritorious claims, such as: (a) qualified one-way cost shifting (the defendant pays the claimant s costs if s/he is found liable, while the claimant pays the defendant s costs only if his/her claim is found to be unreasonable); (b) abolition of cost shifting (providing that each litigant is responsible for his/her own costs); (c) fixed recoverable costs (two-way cost shifting whereby the recoverable costs are fixed as a percentage of the total compensation claimed, the remainder to be borne by each party); and (d) cost capping/immunity (costs immunity for NGOs and individuals pursuing public interest litigation to enforce tobacco control laws, or general laws relevant to tobacco litigation). 23. Provide for a means-based approach to court costs (cost-sharing in relation to the financial means of each party, resulting in the industry defendant bearing the bulk of the cost). 24. Permit contingency fees by lawyers and third party litigation (funding to help claimants secure legal and financial assistance needed to pursue tobacco-related litigation). 7 Each of the reforms discussed in this section are subject to jurisdictional feasibility, notwithstanding encouragement for Parties to undertake reforms towards strengthening the implementation of Article 19. 6
Reforms related to the length of claims 25. Provide specialist procedures and specialist judges to hear civil liability claims against the tobacco industry. 26. Simplify pleading requirements to pre-empt highly technical pleading arguments by industry defendants. Reform appeal processes by restricting interlocutory appeals to exceptional circumstances and with leave of the court, and limiting the number of final appeals. Reforms related to the recovery of compensation from foreign tobacco companies 27. Provide for jurisdiction and enforcement of judgements against foreign tobacco companies by: (a) abrogating the doctrine of forum non conveniens, by which a court may stay a case on the grounds that it should be determined in another, more appropriate jurisdiction; and (b) allowing easier enforcement of foreign judgements through rules of satisfaction of judgement. ACTION BY THE CONFERENCE OF THE PARTIES 28. The COP is invited to consider this final report by the expert group, in accordance with its mandate, as a report on progress made and propose the toolkit contained herein as a mechanism of assistance to Parties in their implementation of Article 19. 29. In addition, in order to further support Parties in strengthening their civil liability mechanisms, the COP may wish to consider requesting the Convention Secretariat, in cooperation with relevant Knowledge Hubs, and other international and nongovernmental organizations as appropriate, including access to available and relevant experts, to: (a) make the toolkit available on the WHO FCTC information platform; (b) update the toolkit as appropriate by incorporating relevant information and material, including information received from the Parties pursuant to their reporting obligations under the Convention; and (c) continue to develop and make available technical and legal resources that may assist Parties in dealing with all forms of liability and other legal challenges undertaken against the tobacco industry where necessary. = = = 7