Philips 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 on Thursday it had struck a deal to settle US class action “economic loss” claims.

Philips will make an initial payment of $479 million (£448 million) to a fund to cover payments to claimants – including patients, hospitals and sleep lab – covered by the settlement, which will vary depending on the type of device each used and its warranty.

Philips says the deal, which still has to be approved by the US District Court for the Western District of Pennsylvania, “does not include or constitute any admission of liability, wrongdoing, or fault by any of the Philips parties.”

Philips recalled millions of breathing devices and ventilators used to treat sleep apnoea in 2021 because foam used to dampen noise from the devices can degrade and become toxic, potentially increasing cancer risks.

Litigation costs

The company had set aside €575 million euro to cover litigation costs in
the first quarter of 2023.

“The final costs may vary based on how many patients participate, but at the end of the day we believe the €575 million euros will cover the costs of the final settlement,” spokesman Steve Klink said, according to Reuters.

Payments under the settlement are not expected to begin until the first quarter of 2024 at the earliest.

The agreement does not settle any personal injury or medical monitoring claims—two other cases against Philips that the company has moved to dismiss.

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, although they stressed they would continue to pursue 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 in a joint statement.