Cigarette company Philip Morris to pay millions

Cigarette company Philip Morris has been ordered to pay millions of dollars in legal fees to the Federal Government. The decision follows the six-year long legal battle over the plain packaging laws implemented by the Gillard government in 2o11.

Phillip Morris, the manufacturer of Marlboro and Longbeach cigarettes, argued that the laws should be invalidated or the company should be awarded millions of dollars in damages. The previous legal case in 2012 resulted in the company being accused of “an abuse of rights”, however this criticism didn’t slow Philip Morris. The company then filed a similar suit in 2015, which was dismissed by the Permanent Court of Arbitration. The court has this week ordered that the cigarette company pay the extensive legal fees for the Government.

Although the exact cost of the legal fees has been redacted from the Court documents detailing the decision, the estimated cost is approximately $50 million, according to Former Treasurer Wayne Swan.

Philip Morris contested the figure, arguing that the millions of dollars in legal fees was “unreasonable for a legal team that consisted primarily of public servants”.

The company cited similar cases in US and Canada, which resulted in significantly lower legal fees than those being claimed by the Government.

However, the government responded that the fees were justified, as they included lawyers, outside counsel, expert reports and other such expenses. The court concurred that all of the expenses were reasonable, and also ordered Philip Morris to pay interest on the amount.

“Taking into account the complexity of issues of domestic and international law relevant in this procedure, particularly for a government team usually not engaged in such disputes, the Tribunal does not consider that any of these costs claimed by the Respondent were unreasonable and should not have been incurred,” the ruling read.

“In making this assessment, the tribunal also takes into consideration the significant stakes involved in this dispute in respect of Australia’s economic, legal and political framework, and in particular the relevance of the outcome in respect of Australia’s policies in matters of public health,” the ruling read.

The Government hopes that such a strong ruling will dissuade other tobacco companies from attempting similar legal battles, and will encourage the widespread implementation of plain packaging.