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RJ Reynolds ordered to pay 23 6bn in damages

Article By: ,  Financial Analyst
July 21, 2014 11:15 AM

The second largest company in the US has been ordered to pay $23.6 billion (£13.8 billion) to the widow of a lung cancer victim.

A US court told RJ Reynolds Tobacco Company to pay remunerations to Cynthia Robinson after she took out a lawsuit against the firm in 2008 following her husband's death in 1996. Ms Robinson argued that the company was negligent in informing customers about the dangers of smoking and it was a contributing factor in her husband contracting lung cancer.

Michael Johnson Snr was diagnosed with the deadly condition despite numerous attempts to quit. Ms Robinson's lawyers said that Mr Johnson had become "addicted" to consuming tobacco and that it was the fault of RJ Reynolds Tobacco Company for failing to provide sufficient warning on their products.

Willie Gary, Ms Robinson's lawyer, said: "RJ Reynolds took a calculated risk by manufacturing cigarettes and selling them to consumers without properly informing them of the hazards. We hope that this verdict will send a message to RJ Reynolds and other big tobacco companies that will force them to stop putting the lives of innocent people in jeopardy."

On top of the $23.6 billion owed to Ms Robinson, RJ Reynolds was also handed with a punitive fine as well as $16.8 million in compensatory damages. The company has vowed to appeal the outcome of the four-week trial stating that the verdict went "beyond the realm of reasonableness and fairness".

The verdict sends out a strong message to tobacco companies all over the world and there are suggestions that this case could open up the floodgates for a host of other claims. In the UK, recent years have seen regulation tightened of the sale of cigarettes.

All packets now come with a warning sign while many supermarkets do not display tobacco products behind the counter and instead are covered by a protective screen.

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