The 40% Settlement

27th October 2022

In Focus: Discussing and clarifying the issue of 40% settlement of total claims with Distillers

Graham Kelly

There has been some discussion on social media suggesting that we have been disadvantaged by settling with Distillers for just 40% of the total claims against them and so we have notionally ‘lost’ out on the other 60%. These claims were researched to clarify the issue and state the facts.

There are two things to bear in mind when considering a scenario of our parents pursuing their claims in court and winning 100% of their claims:

1. Courts rarely (if ever) award a full 100% of claims, and
2. More importantly, if the parents had achieved a better than 40% award in court, then the Thalidomide Trust would not have been set up in 1973 through the continued campaigning instead of the court action.

Comparing the two scenarios

Keeping these two points in mind, there are two scenarios to compare. The first (on the left below) which is what has actually happened with the acceptance of the 40% award. The second (on the right below) which is what could have happened with the rejection of a 40% award and a successful court award of 100%. The analysis has been based on an average beneficiary’s Annual Grant (which was £41,810 in 2022).

In short, it has turned out that we are much better off than if our parents had pursued 100%.

40% Scenario What an average beneficiary has received since 1974	100% Scenario An average beneficiary's possible full settlement back in 1974
In 1974 an average beneficiary would have received a lump sum of £17,556 (40% of the total sum claimed) from Distillers. This is equivalent to £220,029 today (using RPI as the inflation measure). Since 1974, an average beneficiary would have received a total of £632,971 (at today's equivalent value) from Distillers/Diageo. This is made up of their Annual Grant payments and any additional payments (e.g. the CHP).	An average beneficiary would have received a lump sum of £43,890 from Distillers. This is equivalent to £550,073 today (again using RPI as the inflation measure).
Total received: £853,000 (today's equivalent value)	Total received: £550,073 (today's equivalent value)

This means that an average beneficiary has already received £302,927 more, in real terms because of the establishment of the Thalidomide Trust rather than pursuing for 100% settlement prior to 1973.

Of course, Diageo has committed to continue to make Annual Grant payments (adjusted for inflation) to each beneficiary for as long as they live, so this sum will continue to increase over their lifetime.

Thalidomide Trust successfully campaigned for Health Grants

Furthermore, if all cases with Distillers had been settled in full, then the Trust would not have been established in 1973 to provide ongoing support to beneficiaries. The payment of Health Grants since 2009 would not have happened without the Trust being in place.

Remember, the Health Grants came about because of the effectiveness of the Campaign Team that lobbied Government via MPs. It would have been far less likely for individual campaigners to have gained the momentum they did in lobbying the Government without a ready database held by the Trust for effective letter writing to the MPs of beneficiary constituents.

Finally, thanks to Suzanne Lluch (Finance Director) for the number crunching and Rowland Bareham for also working on this.