Diageo Settles Australian Thalidomide Suit, Law Firm Says

Diageo Plc agreed to pay A$89 million ($81 million) to settle claims from more than 100 victims of a drug that can cause birth defects, a law firm said.

The settlement with victims of thalidomide was disclosed at a hearing today in the Supreme Court of Victoria in Melbourne, Slater & Gordon (SGH), a class-action law firm, said in an e-mailed statement. The individual amounts paid won’t be disclosed, the firm said.

Lynette Rowe, on behalf of the other victims, sued Diageo, which in 1997 acquired Distillers Co. (Biochemicals), the Australian and New Zealand distributor of the thalidomide drug. Rowe, who was born without arms and legs, settled her claim in July 2012 ahead of a trial. The trial was delayed to allow for negotiations with the rest of the group.

“This settlement will now see a group of people receive compensation, a result that goes some distance to finally addressing a very grave historic wrong,” Peter Gordon, Rowe’s lawyer, said in the statement today.

Diageo has always tried to act responsibly and empathetically with respect to people injured by thalidomide, Ian Wright, a Diageo director, said in the statement.

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.

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. The thalidomide in pills taken by pregnant Australian women in the 1950s and 1960s were made by Grunenthal, Slater & Gordon said.

Rowe also sued Grunenthal, which claimed to have done nothing wrong and isn’t part of the settlement, according to Slater & Gordon. The law firm plans to seek court approval to have the claim against Grunenthal dropped, Andrew Taylor, a spokesman at Slater & Gordon, said.

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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