Vioxx Settlement Judge Caps Attorney Fees

Attorneys working for clients who are part of the Vioxx settlement will see their fees capped at 32 percent.

That was the ruling yesterday from the U.S. District judge overseeing much of the massive litigation over the withdrawn painkiller.

Judge Fallon of New Orleans is overseeing one of the country’s biggest multi-district cases, assigned to one federal judge for pretrial purposes or possible settlement.

He acknowledged that the usual percentage for law firms ranges between 33.3 percent and 40 percent under normal contingency arrangements, it won’t result in “a paltry award” for the lawyers which he estimates to be about $1.55 billion.

Fallon reasons that the fact that Vioxx maker Merck agreed to a settlement of $4.85 billion last November actually streamlined the work of participating attorneys. 

And Fallon says he wants to keep the recovery higher for the survivors of or those injured by heart attack and stroke from taking Vioxx, fearing they may not have negotiated a favorable settlement with their attorneys.

Hundreds of law firms representing about 50,000 clients can also recover reasonable costs.

871 law firms altogether are involved in the litigation.  A smaller group of law firms involved in the pretrial phase of litigation can receive fees above the 32 percent, but Judge Fallon noted they must come from other attorneys – and not the claimants.

Checks will be sent out this week for partial payments to heart attack victims, representing about 40 percent of the eventual final settlement.  But the monies must be put into an escrow account temporarily while legal fees and insurer’s claims for medical care are deducted. 

Stroke patients or their survivors begin receiving payments in February.

The settlement amount can range from $5,000 to several million depending on how serious the injury, how much Vioxx they took and whether they had other existing health risk factors such as smoking, diabetes or high cholesterol.

Vioxx was pulled from the worldwide market on September 30, 2004, after Merck’s own studies showed it doubled the risk of heart attack and stroke.  

It had generated sales in excess of $2 billion annually at its peak in 2003. Revenues of $1.3 billion were reported in 2004.

More than 20 million Americans had been prescribed Vioxx, many more overseas also were prescribed the painkiller for arthritis which had been touted as a “miracle drug” by Merck of Whitehouse Station, New Jersey.

Comments to the Wall Street Journal legal blog range from criticism of lawyers to recognition that without litigation, claimants would likely have seen nothing.

"I just hope that after the lawyers pay themselves, there will be enough left over to settle with those of us who lost a parent to this drug."

Comment by pb - August 28, 2008 at 10:20 am 

"Why all the whining about the lawyers getting paid? Without them and the risk they took victims of this dangerous drug would never have seen a dime. In addition, our taxpayers would be burdened with having to care for the people who where injured by this drug. I am glad we live in a country where free market economics are the rule and that people can ask questions about drugs we are told are safe. Asking questions and challenging what we are told is the American way. Lets hope we get to keep asking questions in a public forum. A lawsuit is a great way to get answers to questions."

Comment by Anon - August 28, 2008 at 10:45 am  #