AMSTERDAM (Reuters) -Philips said on Thursday it has reached a settlement to resolve one category of legal claims against it following a major recall of the Dutch medical equipment maker's sleep apnea and respiratory devices.
The company said it has struck a deal to settle U.S. class action "economic loss" claims. Philips (AS:PHG) will make an initial payment of $479 million to a fund to cover payments claimants covered by the settlement, which will vary depending on the type of device they had.
The company had taken a 575 million euro ($615.48 million) provision in the first quarter of 2023 against estimated costs for economic loss claims.
"The final costs may vary based on how many patients participate but at the end of the day we believe the 570 million euros will cover the costs of the final settlement," spokesman Steve Klink said.
Philips recalled millions of breathing devices and ventilators used to treat sleep apnea in 2021 because foam used to dampen noise from the devices can degrade and become toxic, carrying potential cancer risks.
The company still faces other legal actions over the recall, including personal injury claims, as well as an investigation by the U.S. Department of Justice. It is in talks with the U.S. Food and Drugs Administration over a "consent decree" or settlement.
Lawyers from four firms who led the class action suit said the settlement was "an important step toward justice" and participants should take the agreement.
However, the lawyers said in a joint statement they would continue to pursue personal injury and other claims against the company.
"We are confident in these claims and we look forward to holding Philips accountable for the physical harm they caused patients," they said.
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