Peterson v Merck Sharp and Dohme (Aust) Pty Ltd (No 6)

Peterson brought proceedings against Merck Sharp and Dohme (Aust) Pty Ltd on behalf of a class of consumers who had purchased a particular drug manufactured by the defendant. The dispute centred around the approval of a settlement reached between the parties under section 33V of the Federal Court Act 1976 (Cth). Peterson sought approval of the settlement after his personal claim had failed. The court was tasked with determining whether the settlement terms were fair and reasonable for the entire class of consumers, despite the absence of independent advice on the matter and the lack of differentiation between class members with varying circumstances.

The court had to consider several legal issues. Primarily, it needed to decide whether the settlement terms were fair and reasonable for the entire class of consumers. It also had to determine if the settlement terms adequately protected the interests of all class members, particularly in light of the absence of independent advice. Another significant aspect was whether the settlement discriminated against any class members, despite their differing circumstances.

In delivering its judgment, the court emphasised the importance of independent advice in assessing the fairness of a settlement in class action proceedings. It noted that, in this case, there was no independent advice provided to the court to ascertain if the settlement was in the best interests of the entire class. The court found that the settlement terms did not adequately address the varying circumstances of the class members. Consequently, the court concluded that the settlement was not fair and reasonable in the interests of the group as a whole and refused the application for approval.

The court's final orders were that the relief sought in the applicant’s interlocutory application dated 15 April 2013 be refused, and that costs be reserved. The entry of orders was dealt with in Rule 39.32 of the Federal Court Rules 2011.