Slater & Gordon says it will book a $10 million non-cash writedown after the High Court decided not to grant its client leave to appeal a full Federal Court decision in the Vioxx class action.
The listed law firm said on Friday the writedown, to be reflected in the full year 2011/12 accounts, had “no cash impact as these costs have been incurred and funds expended”.
Slater & Gordon shares, which were placed in a trading halt prior to the High Court announcement, were down eight cents, or 4.49 per cent, at $1.70 at 1253 AEST after resuming trade on the Australian Securities Exchange.
Vioxx had been linked to an increased risk of heart attacks and strokes and Slater & Gordon’s class litigation involved the Australian subsidiary of global pharmaceutical company Merck.
The drug made billions of dollars for Merck as a top-selling arthritis and pain medication but was withdrawn in 2004 due to fears of increased risk of heart disease and stroke after prolonged use.
In March 2010, the Federal Court awarded the class action’s lead plaintiff Graeme Peterson, who suffered a heart attack in 2003 after taking Vioxx for three years, $287,912 plus interest.
However, the full federal court overturned that decision in October 2011 and Mr Peterson was seeking leave to appeal this decision.
“The High Court today decided that it will not grant Mr Peterson leave to appeal this decision and therefore the decision of the Full Court of the Federal Court now stands,” Slater & Gordon said in a statement on Friday.
Slater & Gordon said the case was funded on a no-win, no-fee basis.