UK Vioxx litigation splits up into US and UK class actions

UK law firms gear up to fight arthritis drug company on back of US victory. By Joanne Harris

In 1999, pharmaceutical giant Merck launched a new painkiller designed to combat arthritis and acute pain. Vioxx was hailed as a “wonder drug” and was promptly prescribed to thousands of patients across the world.

But a year ago, in September 2004, Merck announced that it was withdrawing the drug with immediate notice following the results of a three-year clinical trial which suggested that it increased the risk of cardiovascular disease. Plaintiff law firms across the US immediately began seeking claimants to join class actions. And on 19 August this year, the first verdict was reached. A Texas jury awarded Carol Ernst, the widow of a Vioxx patient, a total of $253m (£140.4m) in actual and punitive damages, kick-starting international interest in the possibilities for compensation for other claimants.

UK law firms have watched the Vioxx saga since September, with the result that even before the Texas judgment several different groups were preparing both US and domestic litigation against Merck. As news of the victory broke, hundreds of UK patients and their families contacted lawyers in the hope that they, too, may be able to claim a portion of Merck’s millions. The media reported that cases were to be brought in the US for UK citizens on the back of the Carol Ernst decision after legal aid was refused for group actions in English courts. As first reported on www.thelawyer. com (23 August), firms involved so far include Welsh outfit Hugh James, Midlands-based Freeth Cartwright, national firm Alexander Harris and Liverpool’s MSB Solicitors. Meanwhile, Lovells product liability head John Meltzer is acting for Merck.

However, the Britons face a number of barriers before their cases can get to trial (if the litigation goes that far), prompting a different set of firms to pursue a subtly different brand of legal action against Merck in the UK.

Meanwhile, the fight on behalf of Americans who took Vioxx is well underway. Mark Lanier, the celebrated Texan attorney who fought Ernst’s case, says he has another 2,000 clients seeking compensation from Merck and is in the process of filing lawsuits in Texas, Louisiana and Merck’s home state of New Jersey on their behalf.

Other US firms looking to get on board include class action specialists Cohen Milstein Hausfeld & Toll, which is advertising online to attract potential class members with the promise of a “free Vioxx claim case evaluation”.

While claimant lawyers believe that they have a strong case in the US, there are several obstacles to be overcome before more people such as Ernst pick up compensation after exposure to Vioxx.

The first is that, although Ernst was awarded $229m (£127.1m) in punitive damages by the Texas jury, the final amount she will be paid will be substantially less – Merck says it will be around the $2m (£1.1m) mark. This is due to a cap on punitive damages signed into law by George W Bush in 1995 when he was governor of Texas.

The second potential obstacle is that, if faced with thousands of claims, Merck could feasibly file for Chapter 11 bankruptcy protection and so avoid paying out. Claimants could be left in the lurch without any recourse to compensation.

UK claimants have an additional hurdle to jump – that of jurisdiction. Paul Balen, a Freeth Cartwright partner advising a number of potential claimants, thinks there is “a pretty good chance of getting a venue in the US”, adding that the US attorneys he is working with are bullish about the prospects. The US is seen as a good forum for a case of this nature because it will be heard before a jury, which will perhaps be more easily convinced by incriminating evidence than a single judge. Hugh James‘s Mark Harvey agrees, saying: “I feel that America is a reasonable and proper jurisdiction to bring this case.”

But some UK law firms have taken the decision not to risk the US, preferring the familiarity of the English court system and embarking on a slightly different tack. Irwin Mitchell, Leigh Day & Co and Goodmans have pooled their resources and currently have 150 confirmed claimants for a group action under the Consumer Protection Act – although that number is rising steadily following the Texas case. Counsel, in the shape of Brian Langstaff QC of Cloisters chambers and Doughty Street Chambers’ Robin Oppenheim, have been instructed. Neither is a stranger to group actions: Langstaff acted for part-time firefighters in last year’s unsuccessful employment case against Kent & Medway Fire & Rescue Authority, while Oppenheim worked alongside Goodmans’ Ian Cohen on the settled action brought on behalf of families affected by the Alder Hey Children’s Hospital organ scandal.

Although the Irwin Mitchell group of firms and those taking cases to the US are using different tactics, they have one strategy in common. Only claimants who suffered from heart problems after taking Vioxx with no previous history of cardiovascular disease are being accepted. It is far easier to prove that these patients have been affected adversely by the drug.

The cases come amid speculation about the future of group actions here in the UK. A lack of legal aid has caused problems for several groups, including most recently the Railtrack Private Shareholders Action Group. The group had to raise its own legal costs through its 55,000 members after a group litigation order (GLO) was refused. It ultimately fought its misfeasance case against the Government with shareholder Geoffrey Weir as the named litigant. Judgment is expected this autumn.

Lawyers are, however, confident that group actions – be they GLOs or Railtrack-style litigation – will continue. Certainly, in the US there is every sign that class actions are as popular as ever. Lanier, a veteran of large-scale litigation, says: “It’s the best measure of redress there is. It allows individuals to stand toe-to-toe with big companies.”

Harvey believes that group actions in the UK have a future, but warns that insurers are waking up to the costs and are beginning to introduce stricter clauses in both before-the-event and after-the-event policies. Both he and Cohen think that funding is the key to future successes for group claimants.

“It needs some cases to get home to encourage the Legal Services Commission that these cases can be won,” says Harvey.

Cohen concludes: “Group actions are going to be around for a while, but one’s going to have to be a lot more creative in the funding.”