The Australian Competition and Consumer Commission will investigate whether there has been any misleading, deceptive or unconscionable conduct in breach of the Trade Practices Act 1974 by British American Tobacco and by Clayton Utz following yesterday's Victorian Supreme Court decision, ACCC Chairman, Professor Allan Fels, said today.
The decision concluded that BAT and Claytons had engaged in a process of document destruction to withhold information relevant to possible litigation.
Today's Australian Financial Review (p24) says Justice Eames found that Mr Wilson (a partner in Clayton Utz) devised a strategy for BAT in 1990 that he believed would enable the company to destroy documents that would harm its defence in smoking and health litigation.
The report also said Justice Eames found there was no doubt that Mr Travers (a partner in Clayton Utz) had intentionally set out to mislead Slater & Gordon, the claimant's lawyers, and to gain an advantage for BAT.
"The ACCC is concerned that these matters raise very considerable matters of public interest. Compliance by all businesses including the legal profession with the requirements of the Trade Practices Act is a matter of significant importance.
"The misleading and deceptive provision of the Act are aimed not only at behaviour which is positively misleading or deceptive but may, in appropriate cases, include behaviour which withholds information if the effect is misleading or deceptive", Professor Fels said.
"There have been a number of cases where acts of omission have been regarded as misleading and deceptive. This is particularly relevant where there are cases where there could be a health concern for consumers.
"The ACCC's concerns extend not only to major businesses but also to any professional advisers they may have to the extent that they become involved in the planning and execution of unlawful behaviour.
"The ACCC has general concerns about the process of document destruction in trade practices matters where document destruction occurs following a requirement under section 155 of the Act that information be provided to the ACCC. Such action is clearly unlawful. However, where document destruction occurs in other contexts it is possible that in particular circumstances this could constitute misleading a deceptive conduct of an unlawful kind.
"The ACCC is also concerned to note in the AFR report that much of the evidence about BAT's strategy came to light only after the judge ruled that BAT had impliedly waived legal professional privilege to legal advice it had received from 1998 concerning the handling and destruction of documents. As a result, legal advice and memos from several law firms had to be disclosed to the other side".
Professor Fels said this would tend to suggest that if legal professional privilege had not been impliedly waived the truth of the matter may never have come out and such important public interest issues would have remained covered under the cloak of legal professional privilege.
"The ACCC is in the process of submitting a report to the Senate as to whether any behaviour of the tobacco companies could be in breach of trade practices law".