British American Tobacco [3] (BAT) has suffered a major legal setback after a Sydney judge found that the company's "document retention policy," under which sensitive documents were shredded, had been developed "in furtherance of the commission of a fraud." In a case before the New South Wales Dust Diseases Tribunal, Justice Jim Curtis heard uncontested evidence from former BAT solicitor Fred Gulson that the policy was designed so that the company could shred potentially damaging documents. Curtis said that the policy created "the pretence of a rational non-selective housekeeping policy." The case before the tribunal will hear argument on whether BAT should bear part of the compensation costs of a lung cancer victim who was a smoker and was exposed to asbestos. BAT has been directed to produce relevant documents within two weeks for a trial that commences on June 26.