Martyn Day may not be an anti-smoking zealot. But he is intent on wiping out more than the entire pounds 700m profit earned each year by Imperial Tobacco and Gallaher. He is co-founder of Leigh, Day & Co, the London firm of personal injury lawyers, which is suing the two tobacco giants for damages on behalf of 36 lung cancer victims.
Analysts expect Imperial to report half-year pre-tax profits of up to pounds 161m on Wednesday. Gallaher, which made operating profits of pounds 362m last year, is to be spun off by its US parent American Brands in three weeks' time on a market capitalisation of around pounds 2bn.
Between them the two companies have around 80 per cent of the UK market with brands like Regal and Superking (Imperial) and Silk Cut and Benson & Hedges (Gallaher).
Mr Day is proceeding on a "conditional fee" basis, a UK version of the "no win no fee, big win big fee" deals that have enriched US ambulance- chasing lawyers. The Legal Aid Board stopped funding the case last year. Day admits the board must balance costs against chances of success. "But I do think the decision was rather cowardly."
How much is he after? About pounds 50,000 for each of his clients, mostly men and women in their sixties who started smoking as teenagers. His claim is deceptively simple. It does not, like most US cases, centre on what he calls "the emotive issue of nicotine and addiction".
The level of tar in cigarettes is closely linked with lung cancer. "Like other companies, they have a common law duty of care to eradicate or minimise the risks their products cause to their customers. It was their duty to drive down tar levels from around 1957 onwards, when various studies showed that tar was a primary killer."
The companies were, Day says, too slow to promote filter cigarettes or to reduce tar levels. They did not even supply information on relative tar levels until 1975. Neither company will respond in detail, except to say they will defend themselves vigorously.
The award Day thinks he might win seems small when set against the $750,000 (pounds 465,000) a Florida jury awarded last August to Grady Carter, still one of only two cases the US tobacco industry has lost - though the first was thrown out on appeal, a result the industry hopes to repeat in the Carter case.
Might the two British companies settle? "We have no intention of settling," said Paul Sadler, spokesman for Imperial Tobacco. "I have nothing to say on that," said Ian Birks, spokesman for Gallaher.
If Day wins, the amounts add up. In the UK a judge would handle the case without a jury. A decision for Day would, he says, set a precedent and open the floodgates to claims from other lung cancer sufferers. In the US such lawsuits go before a jury, and one decision has no necessary impact on what another jury might decide.
Last Monday another jury in Florida concluded that a woman who died from lung cancer at 49 had only herself to blame, rather than RJ Reynolds. Day is undeterred. He says there are 130,000 UK smoking-related deaths each year, over 30,000 resulting from lung cancers. "We estimate that there are at least 20,000 people who would have a decent claim."
At pounds 50,000 a victim, that adds up to pounds 1bn a year. "If you add up their pre-tax profits, the industry in the UK would be wiped out," says Tony Silverman, analyst at NatWest Securities.
Day, however, reckons the industry could finance an annual liability of this size by adding around 30p to the price of each pack sold in the UK every year.
That sounds relatively pain-free. Not so, says Mr Silverman, who points out that neither Imperial nor Gallaher are monopolies; they would be vulnerable to competition from companies which did not face claims in the UK. "They wouldn't be able to pass on price rises. Their shareholders would have to pay."
Analysts give Day little chance. Events in the US are having an impact in London; Imperial shares rose 8p to 409.5p last Tuesday in reaction to RJR's court victory in Florida, even though the British company does not sell a cigarette in the US.
"I think that early on Imperial and Gallaher thought they were dealing with a High Street solicitor with a Sunday afternoon hobby," says Silverman. They don't now. "Of course we take him seriously," says Sadler.
In his trademark open-necked sports shirt and slacks, Day hardly even looks like a professional lawyer. His offices are not typical either; two copies of The Big Issue, a few children's toys, and a copy of the Sun lie around a spartan waiting room. The 40-year-old father of four children, all under seven, is relaxed, unstuffy and unpompous.
Day's firm has largely thrived by taking on David-versus-Goliath cases paid for by the taxpayer via the Legal Aid Board. "I always fight on behalf of the ordinary guy, I never act for companies," says Day, whose "regular guy" image extends to supporting Millwall. He also plays the piano and paints.
Low-profile maybe, but the firm has fought some high-profile cases. It lost a lawsuit against British Nuclear Fuels alleging that radioactivity around Sellafield had caused leukemia. Day is helping prepare two test cases on whether electricity pylons have caused leukemia in children.
His firm is also suing the Japanese government for the ill treatment suffered by 50,000 former allied prisoners of war. "My uncle was a POW and he asked me to help," says Day.
"I don't do anything I feel uncomfortable with, and I like cases where I can put my heart into it as well as my head," says Day. Coming from this accountant's son from Yorkshire, this does not sound priggish. He admits he is lucky to have a job which pays well and appeals to his New Labour principles.
Day is a fervent Blairite, a former Labour councillor, on the executive of the Society of Labour Lawyers, and on the board of Greenpeace. He helped draft In Trust for Tomorrow, Labour's document on the environment.
One of its key proposals is to encourage people to bring cases against polluting companies by scrapping the traditional "loser pays" rules, under which a failed plaintiff must pay the winner's costs as well as his own.
These concerns arise in the tobacco case; Imperial and Gallaher are threatening to pursue losing claimants for costs. But Day says: "Think of making victims bankrupt for a few hundred quid each in costs. What would that do for the companies' image?"
Taxpayer cash has helped put his firm on the map. Founded 10 years ago, Leigh, Day & Co now has 65 staff. Two years ago, the firm received pounds 8.3m from Legal Aid, the largest amount paid to any solicitors that year. Day thinks Legal Aid will pull out of personal injury cases completely, so he will have to take on more cases on a conditional fee basis.
If he wins the cigarette case, Day would be entitled to costs plus an uplift - profit, if you like - of the same amount again. He has opted to limit the uplift to 25 per cent above costs. "But clearly if we win we will have done very well financially," says Day. His costs could hit pounds 3m, mostly time, not cash spent.
Day will not say what he charges, or what his firm's annual fee income is. "It's not enough to buy a private jet," he jokes. But he defends the amounts lawyers stand to gain from any industry-wide US settlement. "If these lawyers had not invested their own time and money in pursuing these companies they would never have been brought to book for what they have done."Reuse content