Sulzer Medica ruling delayed

Sulzer Medica is "cautiously optimistic" about a class settlement swissinfo.ch

A federal judge in the United States has deferred her decision on Sulzer Medica's plan to settle legal action relating to the recall of faulty hip implants and the withdrawal of defective knee implants. However a provisional ruling is expected shortly.

Earlier this month, the Winterthur company proposed a package estimated at $780 million (SFr1.3 billion) and asked a US district court to effectively collect all pending lawsuits to meet patients’ claims “quickly and fairly”.

A settlement would set compensation for hundreds of lawsuits stemming from the implants.

At Tuesday’s hearing before judge Kathleen O’Malley in Cleveland, Ohio, lawyers representing the Swiss company put forward their arguments in favour of the settlement once again. A number of lawyers acting for the victims claimed they were in favour of the plan.

Opponents of the compensation package, who had until last Friday to submit their written arguments, declined to comment. According to one of the judge’s assistants, at least 50 depositions were handed in to the court.

The majority of these came from Texas, California and Florida, where several suits against Sulzer Medica were lodged.

Judge O’Malley refused to say when she would rule on whether the compensation plan would be accepted or rejected. Neither did she state when the verdict would be announced. However, according to a source close to the case, the decision could come over the weekend.

Texas decision anticipated

A court in Corpus Christi, Texas, is expected to rule this week on the first claim against Sulzer Medica at the state level.

Sulzer Medica and its star lawyer Richard Scruggs are opting for a settlement at the federal level because they maintain the company would not be able to survive multiple judgements against it at the state level.

The company has estimated that there will be 4,000 corrective surgeries for hips and knees. The number of lawsuits filed remains 1,029 for hip shells and two for tibial baseplates.

Under the terms of the proposed settlement, Sulzer Medica would pay patients needing multiple corrective surgeries $97,500 (SFr163,117) in cash and equity, while those requiring a single operation would receive $57,500. The spouse of the patients would also receive compensation.

Patients who received a hip shell or tibial baseplate and did not require corrective surgery would receive $2,750 in cash and equity and their spouses would also receive compensation.

“It’s from our side a fair solution for the patients and also permits, even with heavy burdens over the next years, the survival of the company,” Sulzer Medica spokeswoman Beatrice Tschanz told swissinfo.

Insurance, company payments

Sulzer Medica has said that the compensation payments would be made by insurance coverage and by 50 per cent of group net income “over the next few years”.

The compensation in equity requires the approval of shareholders who are expected to vote on the creation of authorised capital at a special shareholders’ meeting later this year.

In reaction to the Sulzer Medica offer, some lawyers in the US called the deal unfair and vowed to challenge it in court.

Some legal experts have also questioned whether the courts will permit the company to tie up its assets to benefit small claimants over more seriously injured people who might win big court awards.

swissinfo with agencies