Nurofen settles $3.5 million class action: Australian Consumer Law Update
The makers of Nurofen have agreed to pay $3.5 million to consumers who may have been misled by its packaging after a class action against the product. This follows the decision by the Full Federal Court last year which ordered the company to pay a penalty of $6 million for making misleading representations about its Nurofen Specific Pain products. This case provides a significant reminder of the importance of complying with consumer legislation.
In 2011, Reckitt Benckiser released the Nurofen Specific Pain Range which claimed to “target” back pain, migraine, tension headache or period pain. The range was set at a significant price premium to regular Nurofen. Between 2011 and 2015, the company sold 5.9 million packets of the specific pain medication, yielding revenue of $45 million. The products included:
- Nurofen Migraine Pain ibuprogen Iysine 342 mg tablet blister pack
- Nurofen Tension Headache ibuprofen Iysnine 342mg tablet blister pack;
- Nurofen Period Pain ibuprofen Iysine 342 mg tablet blister pack;
- Nurofen Back Pain ibuprofen Iysine 342 mg blister pack.
Last year, the ACCC successfully argued in the Federal Court that the pain specific products were chemically identical despite claims they targeted specific pain. The Federal Court found that the products were misleading consumers and ordered the company to pay $6 million and the ACCC’s costs.
Following the Full Court’s decision, Reckitt Benckiser applied for special leave to appeal to the High Court of Australia on a number of grounds, including that the Full Court had erred in its assessment of consumer loss. In April 2017, the High Court dismissed the company’s special leave application with costs.
Consumer Class Action
This year, Bannister Law launched a class action in the Federal Court against Reckitt Benckiser. Yesterday, the law firm announced that the drug company had made an offer of $3.5 million to settle the claim. The reimbursement scheme is subject to final approval in the Federal Court.
Bannister Law says it anticipates that settlement notices will be published in Australian newspapers, calling for people who purchased the products between January 2011 and December 2015 to register a claim.
The law on Misleading and Deceptive Conduct
Section 18 of the Australian Consumer Law provides that “a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.” This section of the ACL covers conduct across a wide range of business activities including contracts and advertisements.
Determining whether conduct was misleading or deceptive is a question of fact, determined by looking at the circumstances of each case. It is important to look at how the behaviour of the business affects the audience’s impression of a good or service. When deciding if conduct is misleading or deceptive, or likely to mislead or deceive, the most important question to ask is whether the overall impression created by your conduct is false or inaccurate.
The wording ‘likely to have’ in section 18 means the plaintiff doesn’t need to prove the conduct has actually misled or deceived a person, merely that the conduct is inherently misleading or deceptive. According to the decision in Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435, the misleading conduct does not have to be intentional.
The remedies for contraventions of section 18 include:
- Damages (see section 236 ACL)
- Compensatory orders (see section 237 ACL)
Impact on consumers
If you purchased one of the abovementioned products between January 2011 and December 2015, you may be entitled to compensation. For updates on this matter, register your details at nurofenclassaction.com.au.
Want to know more about Australian Consumer Law? Please don’t hesitate to contact our experienced Newcastle commercial lawyers at Butlers Business and Law on (02) 4929 7002 or fill out an enquiry form on our website.