9 years after the recall of the drug Vioxx some of the Canadian victims will be compensated by a class action settlement.
The Vioxx class action settlement for Canada is being implemented. Filing claims opened April 20, 2013, and closed August 19, 2013. Claims are still being assessed by the claims administrator as of April 2015. This post details how the settlement process proceeded. For up-to-date information on the status of the claim now please read our newer post on the topic.
The courts of all provinces approved the Vioxx settlement for enforcement and notice was published that we would be able to submit claims to the claims administrator from Saturday, April 20 to Monday, August 19, 2013. Notice was published in major newspapers across Canada on Saturday, April 20th. This followed the main settlement approvals which took place in 2012. Details are as follows:
In the summer of 2012, a settlement of Vioxx injury claims in Canada was presented for approval to courts in Ontario, Saskatchewan, and then Quebec. The courts were asked by lawyers for Merck and lawyers for the class action to approve a settlement that was negotiated in 2011 and announced in January 2012. For background information, settlement details, and events leading up to settlement approval please read our earlier posts.
The courts were asked to either accept or reject the negotiated agreement and also approve the fees and expenses to be paid from the settlement to the consortium of law firms across Canada who were involved in the class action proceedings. There was no jurisdiction to change the terms of a settlement. In a decision released September 18, 2012, Madam Justice Leitch of Ontario’s Superior Court of Justice approved the settlement and approved the fees, taxes, and disbursements of the class-action lawyers. A similar approval decision was issued by Justice Marcotte of the Quebec Superior Court on October 4, 2012. Justice Currie of the Saskatchewan Court of the Queen’s Bench also gave approval but without issuing reasons on July 25, 2012.
The settlement as approved provides for the following payments to be made by the drug manufacturer Merck:
- 1. $3,500,000 to be paid to Canada’s provincial health insurers to reimburse medical expenses of Vioxx victims.
- 2. $1,000,000 to be paid for the cost of notices and claims administration.
- 3. $6,000,000 to be paid to the class action lawyers allocated as approximately $4,500,000 for legal fees, $1,000,000 for expenses and $500,000 for GST and provincial taxes apply to the legal fees. This does not include any money for the lawyers representing individual claimants who will be paid from the money available to pay actual claims of Vioxx victims.
- 4. $22,612,500 to be paid to Vioxx victims who are eligible for payment under the settlement. That amount will be increased if there are over 1,500 such people to a maximum of $26,381,250. Most claimants will pay their own lawyers a percentage of their recovery for legal fees, taxes, and expenses none of which are provided for in the settlement.
To be eligible for payment under the settlement a person must pass both the “usage gate” and the “event gate”. The usage gate requires a certain amount of Vioxx to be consumed in the time immediately before the event. The event gate requires a person claiming to have had a heart attack, sudden cardiac death, or an ischemic stroke. Stroke victims will be given $5,000 compensation regardless of the severity of the stroke or its lasting effects. It is estimated for those with a heart attack or sudden cardiac death that, after deductions for various risk factors (other than Vioxx use) and after legal costs, the average person will receive $15,000 to $25,000 compensation. That means some will receive more and some will receive less. The maximum in the best case would be about $100,000 before legal fees. There is also paid to spouses and children (including adult children) of victims which is additional money up to 20% of what is paid to the principal claimant. In every case, certain medical and pharmacy records are required to prove used, show other risk factors, and prove that there is a qualifying event. The cost of obtaining records is an expense that is to be paid from the compensation received. As well most claimants will pay from the compensation legal fees averaging one-third of the compensation paid. They will also pay provincial and federal tax (PST, HST, GST) on the legal fees. There is no income tax payable on the net compensation that victims and their families will actually receive.
The compensation being paid to Vioxx victims is clearly quite low in relation to the seriousness of having had a heart attack, stroke, or sudden cardiac death. The court considered that these events are common in Canada among persons who have not used Vioxx and that use of Vioxx is not necessarily the cause of the event. They considered expert medical opinion on Vioxx’s role in causation noting that the connection to stroke is not as clearly proven as the connection to a heart attack. They accepted that persons with other conditions not covered by the settlement were a minority in the class and that it was reasonable and in the best interests of the class as a whole to accept a settlement that did not compensate them. The courts considered the continuing denial by Merck of any liability and the risk of the case not succeeding if the settlement was not approved. They did consider the negative result in the Australian court and the fact that cases tried in the US had mixed results. It was noted that even if the case proceeded to trial successfully payment of claims could be delayed by appeals. The court decided that the settlement is in the best interests of the class members as a whole.
The approval decisions had to be confirmed for enforcement purposes in the courts of all other Provinces. This had to be completed before any claims for Vioxx victims can be submitted for processing to the class action administrator. The Miskin law office has completed submitting Vioxx claims for processing and payment. We have been in contact with the class action administrators who have received claims for compensation and are now processing them. We sent claim forms to clients to sign and also have signed by family members who are eligible for compensation. Family members do not get compensation in stroke cases. After assessment of all claims, notices will be sent out by the claims administrator for every claim filed and payment of Canadian Vioxx claims will finally begin. This may take many more months.
We will be contacting our clients for further information as may be needed by the claims administrator to assess their claim and also we will let clients know as soon as we have a word of assessment of their claim. The time from assessment to payment of claims may again be lengthy.