(CNN) -- The key issue in the tobacco-settlement negotiations was liability. In return for paying billions of dollars and accepting curbs on their marketing practices, tobacco companies wanted some form of immunity from future lawsuits.

The state attorneys general on the other side of the table were against any kind of blanket immunity.

The talks began in earnest after Ligget Group raised the white flag in March, becoming the first tobacco company to admit that cigarettes are addictive and can cause cancer.

Liggett, maker of the Chesterfield and Lark cigarette brands, agreed to pay 22 states an estimated $30 million annually or about $750 million total, and turn over 25 percent of its pre-tax profits for the next 25 years.

This was a historic turning point.

Previously, tobacco companies seemed invincible. In fact, the tobacco industry had never lost a lawsuit until July 10, 1996, when a Florida jury told Brown & Williamson Corp. to pay $750,000 to a smoker and his wife.

Legal defenses are fading

That verdict is being appealed, but the tobacco companies face more than a dozen other lawsuits this year. And despite a May 5 jury verdict that absolved R.J. Reynolds of responsibility in the lung cancer death of a smoker, nationwide pressure on the industry is building.

And the legal environment is more hostile than ever. Today, state laws and legal precedents hold manufacturers more liable for the effects of their products.

And the old legal defense of "contributing negligence," which prevented lawsuits by people with some measure of responsibility for their own condition, is no longer viable in most jurisdictions. Instead, a defendant can be held partially liable and forced to pay a corresponding percentage of damages.

Finally, the notion of "strict" liability has developed, meaning defendants can be found liable whether or not they are found negligent. Thus tobacco companies can be held responsible for the damage done by cigarettes even if they weren't aware of the potential dangers.

These changes have helped nudge the industry toward a conciliatory position and made protection from further liability a crucial point in the settlement talks.

The settlement still needs to clear a significant hurdle -- Congress and President Clinton must ratify it.