Bloomberg News

Diageo Settles Australian Thalidomide Suit, Law Firm Says

July 17, 2012

Diageo Plc agreed to pay more than A$1 million ($1 million) to an Australian victim of a drug that can cause birth defects, opening the way for settlement talks with more than 100 other affected people, a law firm said.

Lynette Rowe sued Diageo, which in 1997 acquired Distillers Co. (Biochemicals), the Australian and New Zealand distributor of the thalidomide drug, Slater & Gordon, a class-action law firm, said in a statement today. Rowe was born without arms and legs. Diageo, the maker of Smirnoff vodka and Johnnie Walker Scotch whisky, didn’t immediately respond to an e-mailed request for comment sent to its media department.

“The amount of settlement will remain private but I can say it is a multimillion-dollar amount,” Peter Gordon, Rowe’s lawyer, said in the statement. “Diageo has done the right thing.”

The settlement will form the basis of negotiations between London-based Diageo and more than 100 other people claiming to have been harmed by thalidomide who have contacted Slater & Gordon (SGH), the lawyer said. A trial scheduled to begin in state court in Melbourne on Oct. 8 will be delayed until at least the middle of next year to allow for the negotiations, Gordon said.

A single dose of thalidomide taken during pregnancy can cause severe birth defects or the death of an unborn baby, according to the U.S. National Institutes of Health.

Thalidomide Maker

Grunenthal GmbH introduced the drug in West Germany in 1957. It was prescribed to women to treat morning sickness, according to research published on the University of New South Wales’ website.

Rowe also sued Grunenthal, which claimed to have done nothing wrong and isn’t part of the settlement, according to Slater & Gordon.

“The facts about Grunenthal and thalidomide need to come out,” Michael Magazanik, a second lawyer who represented Rowe, said in the statement. The thalidomide in pills taken by pregnant Australian women in the 1950s and 1960s was made by Grunenthal, he said.

“It is a matter of moral importance to Grunenthal to be actively involved in charitable efforts to improve the situation of thalidomide victims on a sustainable basis,” according to a website of the German company. “We seek to work together with thalidomide victims to devise projects for the provision of specific needs-based support.”

To contact the reporter on this story: Joe Schneider in Sydney at jschneider5@bloomberg.net

To contact the editor responsible for this story: Douglas Wong at dwong19@bloomberg.net


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