Reynolds payout hits tobacco firms

A US court has forced tobacco group RJ Reynolds to pay nearly $200,000 (£127,000) to a Florida smoker - only the second payment made by a tobacco company to a plaintiff in a court case.

The judgment is a blow to the industry which had hoped that its multi-billion dollar settlement in 1998 with US state governments would lift the legal cloud that had hung over it for a decade.

The first payment by a tobacco company was from Brown & Williamson, the US subsidiary of British American Tobacco, in 2001. Normally, companies head off paying such awards by starting a lengthy appeals process.

Reynolds said the cheque for $196,000 it has sent to Floyd Kenyon was not a settlement. The sum represented $165,000 awarded by a jury to Kenyon in compensatory damages, plus interest.

'Under Florida law we were required to do it this way because we were not allowed to post a bond pending the appeal,' said Ellen Matthews, a spokeswoman for Reynolds.

The payment frees the company to appeal against the court's decision.