Taxpayers are facing a bill of up to €1 million in legal costs incurred by several tobacco companies in challenging proposed new anti-smoking legislation which a High Court judge yesterday described as "fatally flawed from the outset" because of the failure of the State to give advance notification to Brussels under an EU directive.
However, in what Mr Justice Kelly described as "a patriotic gesture", one company, Philip Morris BV, said it was not seeking its costs against the State.
The bulk of the Public Health (Tobacco) Act, 2002, which provided for new restrictions on the promotion and advertising of tobacco products and on sponsorship by tobacco companies, is to be scrapped but may be re-enacted in a revised form.
The Minister intends to proceed with proposals to ban smoking in public places.
Given the decision to scrap most of the Act, the actions by the companies were yesterday struck out by consent of both sides, with the companies having liberty to bring a fresh challenge if necessary.
The State conceded it would have to pay the legal costs of the companies but opposed an application by Mr Dermot Gleeson SC, for P.J.Carroll and others, for higher costs arising from the conduct of the proceedings.
Mr Gleeson criticised the State's delay in dealing with the notification issue.
He said the Minister had now withdrawn some 95 per cent of the Act, including sections which the European Commission had not suggested required to be notified.
The companies had argued those sections were unenforceable and in breach of the Constitution.
Mr Frank Clarke SC, for the State, said it was reasonable for the Minister to engage in extensive consultation over the notification issue prior to informing the court late last month that the Act should have been notified and was not.
There was no undue delay on the Minister's part, counsel argued.
He added that the Minister had withdrawn additional sections because he was advised there was a risk that these were also subject to notification.
Giving his decision allowing for some higher costs, Mr Justice Kelly said the situation was "extraordinary on any view".
The Act was enacted on March 27th, 2002, and within a short period the Minister was informed by the Irish Tobacco Manufacturers' Advisory Committee of its view that certain sections of the Act required to be notified to the European Commission under the Technical Standards Directive and asking if the Act had been or would be notified.
The judge said that letter had received an "anodyne" acknowledgment.
On May 30th, 2002, a without-prejudice notification of the Act was made to the EC.
However, notifications had to be made when a Bill was at draft stage and not after it became law.
On June 26th, 2002, the tobacco companies initiated their challenge to the Act, claiming that substantial portions of it were unconstitutional and inoperable.
