Peterson v Merck Sharp & Dohme [2013] FCA 447 | Case summary

REASONS FOR JUDGMENT 1 In each of two proceedings presently before the court - Peterson v Merck Sharp & Dohme (Australia) Pty Ltd (VID 451 of 2006) ("the Peterson proceeding") and Reeves v Merck Sharp and Dohme (Australia) Pty Ltd (VID 859 of 2008) ("the Reeves proceeding") - the applicant has, with the consent of the respondents, sought the court's approval to a settlement pursuant to s 33V of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act"). The Peterson proceeding is at a more advanced stage than the Reeves proceeding, and I shall deal with it first. 2 The Peterson proceeding was the subject of reasons for judgment which I published on 5 March 2010: Peterson v Merck Sharp & Dohme (Aust) Pty Ltd (2010) 184 FCR 1. On 18 June 2010, I made orders giving effect to those reasons, including orders requiring the first respondent to pay compensation to the applicant, and orders providing answers to a number of questions which were considered to be common to all members of the group upon whose behalf the applicant sued pursuant to Pt IVA of the Federal Court Act: Peterson v Merck Sharp & Dohme (Australia) Pty Ltd (No 5) (2010) 87 IPR 234. 3 On 4 August 2010, I made orders by consent that were calculated to bring a degree of organisation into the hearing of the claims of group members other than the applicant. Those orders provided that "the advancement of the individual claims of group members, other than the applicant, be in accordance with the following exclusive registration protocol …" The protocol provided for a notice to be published in various newspapers, to be displayed on the website of the applicant's solicitors, and to be sent by mail or email to all group members who had contacted those solicitors with a view to making claims in the proceeding. The orders then provided as follows: Every group member who intends to advance an individual claim in this proceeding register his or her intention by taking one of the following steps by no later than 4:00 pm on 25 August 2010: (i) contacting the applicant's solicitors, Slater & Gordon, by telephoning 1800 555 777 or emailing vioxx@slatergordon.com.au; (ii) completing and delivering or sending the "Registration of Intention to Claim" form below to the Federal Court of Australia, Owen Dixon Commonwealth Law Courts building, 305 William Street, Melbourne, VIC, 3000. These orders had the effect of procedural directions that required every group member who proposed to advance an individual claim to contact the applicant's solicitors or to send to the court the form of registration which was annexed to the order. A total of 1660 group members registered their intentions to advance individual claims by the date stated in the above order. 4 On 12 October 2011, the Full Court upheld an appeal from my orders of 18 June 2010 to the extent that they gave judgment in favour of the applicant on his personal case: Merck Sharp & Dohme (Australia) Pty Ltd v Peterson (2011) 196 FCR 145. The Full Court also granted leave to appeal from so much of those orders as related to the circumstances of group members other than the applicant. Having granted that leave, the Full Court ordered that the appeal be allowed to the extent indicated in the reasons for judgment. By a further judgment handed down on 18 November 2011 - Merck Sharp & Dohme (Australia) Pty Ltd v Peterson (No 2) [2011] FCAFC 146 - the Full Court dealt with costs in the appeal and the application for leave, and decided not to disturb the answers which I had given to the common questions on 18 June 2010. 5 With respect to those questions, their Honours said ([2011] FCAFC 146 at [9]): We do not consider that any of the primary judge's answers to the questions relating to the group proceedings need to be altered. The primary judge's answers and our reasons of 12 October 2011 illustrate the absence of commonality in relation to many of these questions. We consider that the primary judge's answers to the scheduled questions can stand, notwithstanding our conclusion that the increased relative risk of a myocardial infarction resulting from the consumption of Vioxx is not sufficient to demonstrate unfitness for purpose; see [174] and [181] of our reasons. Further, the answers, in particular the answer to question 5, should be read in the light of our reasons. Finally, for the reasons given at [129]-[138] of our reasons, we consider that his Honour's answer to question 3 was correct. In order to explain the significance of this paragraph of their Honours' reasons, it will be necessary to turn to some of the common questions and answers. 6 The common questions and answers included the following: Question 2. Is there a physiological mechanism by which the consumption of Vioxx is capable of causing any and which of the Vioxx cardiovascular conditions? Answer: As amended by replacing "causing" with "contributing to the onset of": In the case of myocardial infarction, yes; otherwise, no. Question 3. If the answer to question 2 is in the affirmative, then for each such condition, what is the physiological mechanism? Answer: The aggregation of thrombotic material in the vasculature as the result of the blocking of the production of prostacyclin by the inhibition of COX-2 in the absence of any blocking of the production of platelet thromboxane. Question 4. Did the consumption of Vioxx increase the risk of suffering any and which of the Vioxx cardiovascular conditions? Answer: In the case of myocardial infarction, yes; otherwise, no. Question 5. If the answer to question 4 is in the affirmative, was the increase in risk material? Answer: To the extent that question 4 was answered in the affirmative, yes. Question 6. If the answer to question 5 is in the affirmative: (a) when, if ever, did the First Respondent ("Merck Australia") first know that the consumption of Vioxx materially increased the risk of suffering the condition? (b) when, if ever, ought Merck Australia have first known that that consumption of Vioxx materially increased the risk of suffering the condition? (c) did Merck Australia owe the group members a duty to take reasonable care to avoid acts and omissions that may expose them to a material increase in the risk of suffering the condition as a consequence of consuming Vioxx tablets? Answer: (a) & (b): Late September 2004. However, Merck Australia was first presented with a worrisome and important signal of potential cardiovascular risk associated with the consumption of Vioxx in March 2000. (c): Yes. …. Question 9. If the answer to question 5 is in the affirmative: …. (d) Did Merck Australia fail to provide adequate information, advice or warning to the general public or to health care professionals to the effect that the consumption of Vioxx materially increased the risk of suffering the condition? If so, was that failure less than reasonable in all of the circumstances? …. Answer: …. (d): (i) Merck Australia failed to provide adequate information, advice or warning to healthcare professionals generally about the signal of risk referred to in the answer to question 6. Whether that failure was less than reasonable in all of the circumstances is not a common question. (ii) Whether Merck Australia failed to provide adequate information, advice or warning to individual healthcare professionals about the signal of risk referred to in the answer to question 6 is not a common question. (iii) Merck Australia did not fail to provide adequate information, advice or warning to the general public about the signal of risk referred to in the answer to question 6. Question 10. Was it less than reasonable in all of the circumstances, at any time before 30 September 2004, for Merck Australia to distribute Vioxx in Australia? If so, when? Answer: No. …. Question 12. If the answer to question 5 is in the affirmative, did Merck Australia: …. (b) market and distribute and/or supply Vioxx for sale in Australia without providing adequate information, advice or warning to the general public or to health care professionals to the effect that the consumption of Vioxx materially increased the risk of suffering the condition? (c) develop and implement a marketing strategy or campaign by which it formulated and disseminated to health care professionals in Australia, any and which of the following representations about Vioxx: (i) Vioxx has an excellent gastrointestinal safety profile compared with other NSAIDs; (ii) Vioxx has an excellent overall safety profile compared with other NSAIDs; (iii) Vioxx does not increase the incidence of adverse cardiovascular events; (iv) higher rates of myocardial infarction and other cardiovascular events among persons taking Vioxx relative to persons taking other traditional NSAIDs (in particular naproxen) did not indicate that Vioxx increased the risk of suffering adverse cardiovascular events but were attributable to the fact that the consumption of naproxen produced a lower incidence of cardiovascular events because naproxen inhibits platelet aggregation in a manner similar to aspirin while Vioxx does not; (v) the higher rates of myocardial infarction among persons taking Vioxx relative to persons taking naproxen observed in Vigor did not indicate that Vioxx increased the risk of suffering adverse cardiovascular events; (vi) information to the effect that Vioxx was not as safe as other NSAIDs because the consumption of Vioxx materially increased the risk of suffering the condition was incorrect, misleading, exaggerated and/or unreliable? Answer: …. (b): (i) Merck Australia marketed, distributed and supplied Vioxx for sale in Australia without providing adequate information, advice or warning to health care professionals generally about the signal of risk referred to in the answer to question 6. …. (iii) Merck Australia did not market, distribute or supply Vioxx for sale in Australia without providing adequate information, advice or warning to the general public about the signal of risk referred to in the answer to question 6. …. Question 14. Was any of the conduct identified in question 12, in all of the circumstances and context in which it occurred, misleading or deceptive or likely to mislead or deceive in contravention of section 52 of the Trade Practices Act? Answer: As to the conduct identified in answer 12(b)(i): Until 16 November 2001, yes; otherwise, no. …. Question 22. If the answer to question 5 is in the affirmative, were Vioxx tablets not reasonably fit for the purpose of acquisition within the meaning of section 74B of the Trade Practices Act by reason of the fact that the consumption of Vioxx materially increased the risk of suffering the condition? Answer: Not a common question. Question 23. If the answer to question 5 is in the affirmative, were Vioxx tablets not of merchantable quality within the meaning of section 74D of the Trade Practices Act by reason of the fact that the consumption of Vioxx materially increased the risk of suffering the condition? Answer: Not a common question. …. 7 I should next refer to the basis upon which the applicant's personal case failed in the Full Court. Their Honours noted that the applicant "was characterised by a number of risk factors for [myocardial infarction] as at 2001, namely hypertension, hyperlipidemia, obesity and the presence of left ventricular hypertrophy" (196 FCR at 163 [78]). With respect to the epidemiological evidence, their Honours said (196 FCR at 174 [113]): In this case, as has been seen, there was a clear basis for concluding that Mr Peterson does indeed stand apart from the ordinary case. His personal circumstances were such that they afford a ready explanation for the occurrence of his injury independent of the possible effects of Vioxx. The strength of the epidemiological evidence as a strand in the cable of circumstantial proof is seriously diminished by this consideration. The epidemiological studies do not provide assistance in resolving the question whether it was the risk posed by Vioxx, either alone or in combination with the other candidates, which did eventuate in this case. And (196 FCR at 177 [120]): The epidemiological evidence meant that it was possible that Vioxx consumption was a cause of Mr Peterson's [myocardial infarction]. But there were other candidates as causes of his injury, and the claims of those candidates were strong. Shortly before Mr Peterson commenced taking Vioxx, he was, by reason of his age, gender, hypertension, hyperlipidemia, obesity, left ventricular hypertrophy and history of smoking, a member of a group within the community, 25% of whom were expected by the cardiologists to suffer a heart attack within five years. Mr Peterson may simply have been the unlucky one in four of this cohort to suffer a [myocardial infarction]. We are unable to see how it can be said that it is more probable than not that Vioxx, whether alone or in combination with Mr Peterson's personal risk factors, was a necessary condition of the occurrence of his heart attack. 8 Taking into account also the evidence of biological factors, including those upon which the FitzGerald hypothesis was based, their Honours said (196 FCR at 178 [124]): As Sir Frederick Jordan said in Carr v Baker (1936) 36 SR (NSW) 301 at 306: "Conjecture may range from the barely possible to the quite possible". We accept that it is quite possible the Vioxx was a necessary condition of Mr Peterson's heart attack. But in the light of the causative potential of the other factors to which we have referred, we consider that a conclusion that Mr Peterson would not have had his heart attack but for the consumption of Vioxx based on the epidemiological studies and the FitzGerald hypothesis, which was itself subject to unresolved objection, is a matter of conjecture rather than reasonable inference on the balance of probabilities. 9 It is clear that, in the view of the Full Court, the applicant's personal circumstances, including the significant risk factors to which their Honours referred, stood him "apart from the ordinary case", and materially compromised the utility of evidence that might have justified a conclusion, in the "ordinary case", that Vioxx contributed to the occurrence of a heart attack. 10 Reading the answers to the common questions in the light of the reasons of the Full Court as I am required to do, I am bound to conclude that the prospect of there being held to be a causal relationship between the consumption of Vioxx and the happening of a heart attack in the case of a group member other than the applicant has not been excluded by those reasons. The reasons, being concerned with the applicant's own circumstances as they were, leave the court, in my view, with an obligation to consider the individual circumstances of each of the remaining group members who wishes to advance an individual claim. 11 Before proceeding further with the issue whether, in the light of what I have said above, the court should approve the proposed settlement, I should mention the Full Court's treatment of the applicant's case under ss 74B and 74D of the Trade Practices Act 1974 (Cth) ("the TPA"). In the passage from the reasons of the Full Court to which I have referred in para 5 above, their Honours referred to their conclusion that the increased relative risk of a myocardial infarction resulting from the consumption of Vioxx was not sufficient to demonstrate unfitness for purpose. In the part of their Honours' reasons which dealt with suitability for purpose under s 74B of the TPA, the Full Court said (196 FCR at 193-194 [174]): However, it is appropriate here to make some further points about s 74B(1)(d) and (e) of the TPA. Section 74B(1)(d) contains an objective test of reasonable fitness. The manufacturer is liable if the goods are not reasonably fit for the particular purpose identified in subs (c). The primary judge held that because Vioxx "approximately doubled the risk of heart attack, Vioxx was not reasonably fit for the purpose implicitly made known to MSDA" by Mr Peterson (Reasons at [968]). Observing that there was an increase in risk described as "doubling the risk" does not in this case, without more, demonstrate unfitness for purpose. First, the evidence did not support the finding that Vioxx "approximately doubled the risk of heart attack" for Mr Peterson: see [55]-[56], [111], [119]-[125] above. Second, whether Vioxx was not reasonably fit for purpose as use as a prescription medication for treatment of arthritic pain without gastrointestinal effects is a question of some complexity that is not answered by mathematical comparison of a relative risk. As has already been said, prescription medications are rarely risk free. No doubt that is why they are available only on prescription. However, the primary reason why the applicant's case under s 74B failed was that given in para 173 of their Honours' reasons (196 FCR at 193 [173]): Central to that conclusion was the proposition that Vioxx doubled the risk of Mr Peterson's [myocardial infarction]. As has already been shown (see [55]-[56], [111], [119]-[125] above), that proposition should not be accepted. But even if it were to be accepted, it would be of relevance to the application of s 74B only if it were first established that the purpose of acquisition which Mr Peterson made known (expressly or impliedly) was a purpose that was properly to be identified as containing some relevant negative feature or element. Neither at trial nor on appeal was that relevant negative feature or element of known purpose identified with any, let alone sufficient, clarity. In particular, it was not and is not sufficient to observe only that Vioxx was a medication intended for human consumption, and to assert that it then follows that it was impliedly made known to the supplier that a purpose for acquisition of the product was that it should be "safe" for administration or "not dangerous to health". It cannot be presumed in law, and it is not obvious in fact, that Mr Peterson acquired Vioxx for the particular purpose that was or included the purpose of not giving rise to a material increase in the risk of suffering life-threatening conditions. Almost all medications have side-effects. Almost all medications can be contra-indicated for a particular patient or group of patients. The prescription of drugs by a medical practitioner requires experience, skill and training. The patient who has a prescription filled does so relying primarily on the skill and judgment of the prescribing doctor. Questions of dosage and unwanted reactions may be matters for which the patient will look also to the pharmacist. But it cannot be presumed in law, and it is not obvious in fact, that the patient impliedly makes known to the dispensing pharmacist that he or she is acquiring the product that is dispensed for purposes which include some generalised purpose of safety or absence of adverse side-effects. This is reason enough to conclude that s 74B is not engaged. There was, additionally, "a further and conclusive reason" why the applicant's s 74B claim failed, expressed by the Full Court at para 175 as follows (196 FCR at 194 [175]): There is, however, a further and conclusive reason why this claim should fail. Under s 74B(1)(e), Mr Peterson must suffer loss or damage "by reason that the goods are not reasonably fit for that purpose" identified in subs (c): Henville v Walker (2001) 206 CLR 459 at [132]; I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109 at [142]-[143]; and Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at [174]. For the reasons stated at [106]-[126] above, we do not consider that it was more probable than not that the consumption of Vioxx was a necessary precondition of Mr Peterson's heart attack on 8 December 2003. A conclusion that Mr Peterson would not have had his heart attack but for the consumption of Vioxx based on the epidemiological studies and the FitzGerald hypothesis, which was itself subject to unresolved objection, is a matter of conjecture rather than reasonable inference on the balance of probabilities. The claim under s 74B was not made out. It is unnecessary to consider the defences under s 74B(2) of the TPA. The applicant's claim under s 74B failed, therefore, because he had not proved that he made known a purpose of avoiding the risk of suffering a life-threatening condition, because a two-fold increase in risk did not demonstrate unfitness for purpose and because it had not been proved on the probabilities that taking Vioxx was a necessary precondition to his heart attack. Although there are grounds for apprehending that the cases of other group members under s 74B might be problematic in the respects to which their Honours referred, the possibility of any such claim succeeding has not been excluded. 12 With respect to the applicants' claim under s 74D of the TPA, the Full Court held against him primarily on the basis of causation: see para 179 of their Honours' reasons. But their Honours continued as follows (196 FCR at 195-196 [180]-[182]): The primary judge found that Question 23 of the Schedule, which asked "were Vioxx tablets not of merchantable quality within the meaning of section 74D of the [TPA] by reason of the fact that the consumption of Vioxx materially increased the risk of suffering the condition?" was not a common question. That is, the answer to Question 23 could not be determined uniformly across the representative class. Although we have already disposed of Mr Peterson's claim under s 74D, it is appropriate for the purposes of the representative class action to make some observations concerning the primary judge's consideration of the last element of Mr Peterson's claim under s 74D - that the goods must not be of merchantable quality: s 74D(1)(c). Under s 74B(1)(c) and (d), the goods must have been acquired for a purpose made known to the manufacturer. If the goods are not fit for that purpose and the consumer suffers loss or damage because the goods are not reasonably fit for that purpose, the manufacturer is liable. Under s 74D, the subjective purpose for which the goods were acquired is irrelevant. The enquiry is whether the goods are fit for the purpose or purposes for which goods of that kind are commonly bought as it is reasonable to expect, having regard to any description applied to the goods by the corporation, the price received by the corporation for the goods and all other relevant circumstances: ss 74D(1)(c) and (3). The time at which the goods are assessed is the time of supply. The test is objective: Medtel Pty Ltd v Courtney (2003) 130 FCR 182 at [64] and [70]. So much is made clear by the express words of s 74D(2). What then is the position here? The primary judge upheld Mr Peterson's claim under s 74D on the basis that Vioxx was not as fit for the purpose for which goods of that kind were commonly bought as it was reasonable to expect because "they increased the risk of heart attack by a factor of about 2" in the population of the APPROVe study (Reasons at [975]). However, the considerations in s 74D(3) make it clear that an observation that there was an increase in risk "of about 2" does not, in this case, without more, demonstrate unfitness for purpose. We should point out that this does not determine whether Vioxx was of merchantable quality in Mr Peterson's case. It is unnecessary to reach a conclusion on this in light of [178] above. As with s 74B (see [174] above), whether Vioxx was not reasonably fit for purpose as use as a prescription medication for treatment of arthritic pain without gastrointestinal effects is a question of some complexity that is not answered for the purposes of s 74D by a simple mathematical comparison of a particular form of risk. The statute itself recognises that the description of the goods, the price of the goods and "all other relevant circumstances" are to be taken into account in determining what was reasonable to expect about fitness for purpose at the time of supply. Putting aside the applicant's personal circumstances, what is most relevant for present purposes in their Honours' reasons above is that a twofold increase in the risk of heart attack should not, without more, be treated as sufficient to disqualify Vioxx from being of merchantable quality. Again, I do not read in these reasons any suggestion that the prospect of the claim of a group member other than the applicant succeeding is non-existent or negligible. 13 It is next necessary to consider the settlement which is proposed by the parties. Commencing with the 1660 group members to whom I referred in para 3 above, there will be a procedure whereby the solicitors for the parties will determine (with a means of resolution by an independent practitioner in the event of disagreement) whether a particular group member satisfies the following criteria: The 'Event Gate Criteria' - the group member must have a final discharge diagnosis in contemporaneous medical records of a myocardial infarction, or a diagnosis from a treating cardiologist of a myocardial infarction (either contemporaneously or within 14 days of the event), or a sudden cardiac death; The 'Usage Gate Criteria' - the group member must have Vioxx listed as a current medication in the medical records on the date of their relevant injury and have documentary evidence of having received a supply of at least 30 Vioxx tablets within 60 days of the injury, or otherwise have documentary evidence of having received at least 30 Vioxx tablets within 40 days of the injury. 14 Under the settlement proposal, group members who satisfy both of the above criteria will be entitled to payments in accordance with the following terms: For living group members, $2,000.00, provided the total of all payments to living group members does not exceed $497,500.00. In the event that the total of all payments to living group members does exceed this amount, each approved eligible living group member will receive one equal share of $497,500.00; For deceased group members (and approved eligible group members in the Reeves proceeding), $1,500.00, provided the total of all payments to deceased group members in both the Peterson and Reeves proceedings does not exceed $45,000.00. In the event that the total of all payments to deceased group members in both proceedings does exceed this amount, each approved eligible living group member will receive one equal share of $45,000.00. 15 Additionally, the applicant's solicitors, who are party to the settlement agreement, have agreed to meet the costs of administering the scheme for the distribution of the settlement moneys, and have agreed not to charge any solicitor/client costs to any of the group members. The respondents have agreed to waive their entitlement to costs as against the applicant. 16 If reached in the absence of the determination of any of the questions arising in the litigation, an agreement along the lines set out above might be viewed as a pragmatic compromise to the relevant claims. It would not then be known whether the applicant's own case would succeed, whether common questions would be answered in terms favourable to group members, and what might be the determined criteria by reference to which the relative strengths and weaknesses of the cases of the various group members would stand to be assessed. A settlement in which all group members got something, in effect, might then be readily understood. 17 However, the present is not such a case. In the case of group members who ingested Vioxx more or less continuously in the period leading to their heart attacks, the findings made, and the answers to the questions given, in this proceeding have, subject to individual issues of causation, given some grounds for optimism. The settlement recognises that circumstance, of course, by providing for the two "gates" to which I have referred. However, it makes no discrimination between group members who have other risk factors which were decisive in the rejection of the applicant's case by the Full Court and group members who have no other risk factors. Not only is this an important discrimination, it is, as it seems to me, the very basis upon which the applicant's case on causation failed on appeal. 18 Because of the findings which I originally made as to the probability of the applicant not refraining from ingesting Vioxx had his medical practitioner been given the appropriate warning, and had that warning been communicated to the applicant, his case in negligence failed, even at first instance. However, that was a circumstance which was, of its nature, not common to group members. By taking the approach which it does, the settlement also ignores the strength of the claims of the various group members at this level of detail. I could not assume that there may not be group members whose circumstances differed materially from those of the applicant in this respect. 19 According to the authorities to which I was referred, it is now well-established that the question by reference to which an application for approval under s 33V of the Federal Court Act should be addressed is whether the proposed settlement is fair and reasonable in the interests of group members as a whole. There are two features of the proposed settlement in the present case which do not give rise to concerns against the requirements of that test. The first is that the benefit of the settlement is confined, at its broadest, to the 1660 group members referred to in para 3 above. By a procedure which I accepted at the time was fair and reasonable, an exclusive protocol was established on 4 August 2010 by which group members would register their intentions of making claims under the terms of my original judgment in the applicant's case. I now take the view that it is fair and reasonable for the settlement to be confined to those who so registered. The second is that the benefit of the settlement is confined to those who pass through the two criteria gates referred to in para 13 above. I accept that a group member who does not do so would have no real prospect of succeeding even under the terms of that original judgment. 20 However, once the class of potential beneficiaries is narrowed in those two ways, I would have concerns about the approach which the applicant has taken to the distribution of the sum which the respondents, apparently, are prepared to pay for the settlement which is proposed. Under the proposed settlement, for group members whose circumstances are similar to those of the applicant, the payment of the monetary sum proposed would constitute a windfall. For the applicant himself, who lost his case and faces a very substantial liability in costs to the respondents, the proposed settlement would have very obvious advantages. On the other hand, for a group member who might, consistently with the reasons of the Full Court, anticipate a favourable judgment, the settlement would represent an obvious injustice. In relation to those in the latter category, the applicant has taken upon himself the burden of conducting a representative proceeding, and has had a sufficient measure of success to make it both unfair and unreasonable of him now, in effect, to walk away from the claims of those group members on the strength only of being able to settle the claims of the less deserving group members. In doing so without discrimination, the applicant has, in my view, reached a settlement which should not be approved under s 33V. 21 I recognise that my rejection of the present application will leave the applicant with a problem. Various means by which that problem might be addressed, and resolved, were briefly canvassed on the hearing of the application. One of them was that the s 33V application might be adjourned at this stage, thereby giving the applicant the opportunity to address the areas of concern which I have highlighted in these reasons. On reflection, I do not think that would be an appropriate expedient. My rejection of the present application will not give rise to anything in the nature of a res judicata, and a further application may, and I assume will, be made when those matters have been addressed. I do not think that I should, at this stage, say anything further on that subject. It is a matter for the applicant and his advisers. 22 That is sufficient for present purposes, but I propose to mention two further areas of concern. First, I am concerned about the position which will be occupied by the applicant's solicitors on the procedure proposed for the resolution of questions of compliance with the gate criteria referred to in the settlement agreement. It seems to be contemplated that those solicitors would, in effect, advance the case of every group member who, in their assessment, satisfied the criteria. However, once the $497,500 limit has been reached, the admission of every additional member to the class of accepted beneficiaries will give rise to a reduction in the expectation of every previously-admitted member. I am not persuaded that the applicant's solicitors could carry out the function contemplated without inevitably being confronted by a conflict of interest. 23 Secondly, the absence of the advice of counsel with respect to the question whether the settlement is in the interests of group members as a whole is a matter of concern. In confidential paragraphs of an affidavit in support of the present application, a solicitor in the employ of the firm of the applicant's solicitors has expressed certain views about the prospects of group members being able to better the settlement if their claims were to go to trial. While I have no difficulty with the views so expressed, I would have to say that the solicitor was not the ideal person to be the source of assistance for the court on the issues involved. His firm was a party to the settlement agreement, and the reality of the respondents' agreement to waive their entitlement to costs as against the applicant cannot be ignored. I have had some exposure to the applicant's own circumstances, and I consider that I am entitled to infer that his solicitors themselves have a very real interest in securing the settlement to which he has, and they have, agreed. This is, in my view, a case in which the prospects of the s 33V application would have been enhanced by the existence of advice by counsel that the settlement was fair and reasonable in the interests of group members as a whole, having particular regard to the concerns about relative entitlements which I expressed above. 24 For the above reasons, the applicant's s 33V application in the Peterson proceeding will be dismissed. 25 The Reeves proceeding has not been the subject of a hearing on the merits. It was adjourned pending the conclusion of the Peterson proceeding. It differs from the latter in that the group members are all personal representatives of the estates of persons who took Vioxx before their passing. They are identified by name. However, it was not suggested that this was any basis upon which to make a discrimination for the purpose of considering the matter of approval under s 33V. Further, as I understand it, the settlement to which the respondents have agreed is a composite one. It does not contemplate the settlement of the Reeves proceeding without the Peterson proceeding being settled at the same time. In the circumstances, the appropriate order in the Reeves proceeding too is that the s 33V application be dismissed. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup.

Peterson v Merck Sharp & Dohme

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Judgment (7 paragraphs)

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