Philips Settles US Economic Loss Claims Over Sleep, Respiratory Device Recall

Royal Philips PHG has announced a significant development in its ongoing efforts to address concerns related to its voluntary recall of certain sleep and respiratory care devices manufactured by its subsidiary, Philips Respironics. 

The company and its US subsidiaries have agreed to resolve all economic loss claims related to these devices in the US Multidistrict Litigation (MDL).

The agreement does not include or constitute any admission of liability, wrongdoing, or fault by Philips.

Under the settlement terms, which are subject to court approval, eligible participants in the US MDL will receive predefined cash awards based on the type of device affected by the recall. 

Additionally, Philips will provide extended warranties on all replacement devices. 

Participants who return the recalled device to Philips Respironics will receive an additional cash award. 

Individuals who acquired replacement devices post-recall will also be compensated under the settlement.

To cover the estimated costs of the final settlement, Philips Respironics recorded a provision of €575 million in Q1 of 2023.

While the agreement represents a significant step forward, payments to class members are not expected to commence until at least the first quarter of 2024, pending final Court approval.

Price Action: PHG shares are down 1.11% at $21.31 on the last check Thursday.