That is a new factor he says

That is a new factor, he says.The threat that litigation may one day finally snare the manufacturers has long depressed their stock values. "In the past they have been able to stonewall these suits very effectively, but there are danger signals on the horizon for them now".He notes in particular the availability to plaintiffs of documents that surfaced at last year's congressional hearings that suggest deliberate deception on the part of the manufacturers on the issue of addiction. Despite the advice of some that they should consider out-of-court settlements, they appear determined to fight the cases all the way."The tobacco industry has no history of settling lawsuits and I would be very shocked if we were to start now," commented Peggy Carter, a spokeswoman for RJ Reynolds.Peter Schuck, a professor at Yale Law School, is amongst many outside observers who believe the apparent confidence of the companies may be misplaced "I think they should be considerably worried," he said. International sales boomed - especially to the new market economies of Eastern Europe - and even in America cigarette consumption was level. Domestic US manufacturers last year saw pre-tax profits rise by 23 per cent to $6.1bn.

Also at the end of last month, Florida became the fourth US state, after Mississippi, Minnesota and West Virginia, to launch suits against the tobacco companies for damages to cover taxpayers' money spent on free medical care for the poor and elderly suffering from diseases linked to smoking, such as cancer and emphysema.The tobacco giants are maintaining a serene face. But if even a fraction of the 90 million current and former smokers in the US are plaintiffs and were awarded even as little as $2,000 each in damages, the entire market capitalisations of Philip Morris and RJ Reynolds would be wiped out.There is more. They have each agreed to contribute $100,000 towards fighting the case, to ensure an annual war-chest of $6m. Their hope, meanwhile, is to attract literally millions of current and former smokers to join the class action by advertising in 800 different newspapers around the US, in national magazines and even on bulletin boards on the Internet.It is not a case that would be quickly resolved - some say it would take 10 years. The very fact of 60 tort lawyers burying their rivalries and joining for a single case is unprecedented. Unless his decision is reversed by an appeal lodged last Wednesday by the seven tobacco companies that are named - including Reynolds and Morris - it could become the biggest class- action suit in American, if not world, history.The numbers involved are staggering. Their progress through the courts is throwing a darkening shadow across giants like Philip Morris and RJ Reynolds and substantially depressing the value of the share prices.Most attention is being focused on a class action filed in a federal court in Lousiana by a consortium of 60 civil claims specialists on behalf of friends of a local resident, Peter Castano, who died last year of lung cancer.At the end of last month, the judge in the case, Judge Okla Jones, cleared the way for the suit to go to court.

Over 40 years of being targeted by a series of lawsuits, mostly from individuals claiming their health had been wrecked by their products, the manufacturers have not been forced to pay a single cent in compensation.The suits coming forward now look altogether more potent, however. Yet our society has done little to discourage this addiction in our youth".More threatening than the scoldings of Mr Kessler, however, is the burgeoning collection of legal challenges to the tobacco giants. He warned: "Nicotine addiction begins as a pediatric disease. Last week, Mr Kessler suggested at a public meeting at Columbia University in New York that the companies had for years been guilty of deliberately targeting young Americans as potential smokers, by, for instance, putting promotional materials in "the general vicinity of high schools". "Have you noticed all the smoking flights have been cancelled?" the caption asks. "For a great smoke, just wing it". The ad - for Benson & Hedges - is a cheeky rebuke aimed not just at the airlines but at the whole American anti-smoking movement: the city councils that are barring smoking in all public places, the restaurants that won't let you light up even if you are eating outside, and the federal regulators who are threatening to shackle the cigarette companies with new controls.But is the public confidence of the tobacco industry against the tide of negative sentiment real or hollow?Already last year, US cigarette companies had reason to be alarmed when evidence was produced at congressional hearings alleging that for years they had suppressed findings that cigarette-smoking was addictive and, worse, that they had manipulated nicotine levels in their products to ensure smokers became hooked.And the chief of the Federal Drug Administration, David Kessler, at the same time made clear his intention to seek new limits on cigarette sales if not an actual ban.The siege, although briefly dropped from the headlines, has not let up.