Billions sought in plain packaging compensation case

A global cigarette and tobacco company is launching the largest corporate compensation case in history over plain packaging legislation.

Philip Morris will reportedly issue proceedings by Tuesday as it seeks between £9 billion and £11 billion from the UK and Scottish governments to make up for profits it will lose as a result of impending anti-smoking legislation.

The law, which will see standard, plain packaging introduced for all cigarette and tobacco products was backed by MSPs in March after lengthy consultation. It has not yet been implemented.

It follows a separate ban on displaying tobacco products in stores.

The £11bn figure has been drawn up by investment company Exane BNP Paribas based on an annual tobacco profit pool of £1.5 billion.

Another legal action is anticipated from Japan Tobacco International (JTI).

It has been argued that the plain packaging policy breaches international law on image rights and the Human Rights Act 1998, as well as international trademark agreements made through the World Trade Organisation.

The Scotsman has reportedly seen legal advice from former Advocate General of Scotland, Lord Davidson of Glen Clova, and retired judge Lord Hoffman, in which they argue the forced removal of trademarks from cigarette packaging constitutes “deprivation of property” and breaches international human rights law.

A plain packaging law introduced in Australia in 2012 was upheld in court, but Lord Davidson said the case only failed because of a specific provision in the Australian constitution.

Scottish government public health minister Maureen Watt said: “A legal challenge would not be unexpected.

“However, we do not believe that legal threats from the tobacco industry should stop us from taking action to improve the health of our children, families and communities.”

A spokesperson for the Department of Health added: “We have not received any legal claim but we will not allow public health policy to be held to ransom by the tobacco industry.”