Background
Monash IVF Group Limited, a prominent fertility service provider, has recently agreed to a $56 million settlement of a class action lawsuit against them (and their subsidiaries) by more than 700 former patients. The class action sought compensation for financial loss and psychiatric injury for individuals who received genetic testing on their live embryos between May 2019 and October 2020.
It alleged Monash IVF provided non-invasive pre-implantation genetic testing without disclosing the risk of false positives that found an embryo was abnormal, resulting in patients discarding embryos that could have led to successful pregnancies. It was also alleged that defendants secretly used embryos for research that patients had instructed be discarded, forged patient signatures on consent forms, deliberately falsified the results of a clinical trial, and in at least one instance destroyed documents.
For the plaintiffs, the settlement agreement has been said to represent a form of closure after years of legal battle and emotional distress. Michel Margalit, the managing principal of Margalit Injury Lawyers who were representing the plaintiffs emphasised the settlement is a victory for the affected families, stating:
If these remarkable women and men had not brought this class action, Monash IVF’s secret would have remained hidden.
However, despite agreeing to the settlement, Monash IVF has made no admission of liability, saying it believed it was in “the best interests of our patients and people to resolve the matter rather than go to trial”.
The case highlights the pros and cons of class actions, settlement agreements, and has implications regarding the fertility industry.
The pros and cons of class actions
Class actions, like the Monash IVF case, streamline justice by consolidating multiple plaintiffs' claims into a single lawsuit, promoting efficiency and deterring wrongful conduct, with a lead plaintiff acting on behalf of the entire class. They are also powerful in that they can deter unethical behaviour, promote compliance with laws, and provide uniform resolution for all class members, ensuring fair treatment and consistency in handling similar claims.
On the other hand, class actions are complex, time-consuming legal processes with high costs and limited control for individual plaintiffs. Lawyers may work on a no win, no fee basis, with an additional fee if the action results in a successful settlement or judgment. As with all litigation, there are significant motivators to thus reach a settlement.
The pros and cons of reaching a settlement
Settlement in a class action offers a definitive resolution, reduces legal expenses, and expedites the resolution process, reducing uncertainty and stress for both parties, as seen in the Monash IVF case. Both parties can achieve closure and move forward.
However, while settlements can provide timely compensation, they may result in lower payouts for certain class members, do not create legal precedents, and lack clear guidance from the Courts should future issues arise. Plaintiffs may also settle to avoid trial costs. There may be some sense of injustice that the alleged wrongdoer was not fully held to account.
For defendants, there are pros and cons too. Settlements offer controlled resolutions, confidentiality clauses, and "no admission of liability," reducing negative publicity and protecting reputation. However, settlements can be costly and may not fully absolve the defendant of liability in the eyes of the public.
Nevertheless, there are protections. Any settlement agreement needs to be approved by the court, which will consider factors such as the adequacy, fairness, and best interests of class members; and that the settlement is not unduly favourable to defendants. The Monash IVF settlement agreement will be subject to such scrutiny.
Implications for the fertility industry
The Monash IVF case sends a warning to the IVF industry, as large settlements can deter potential wrongdoers. Notably, not only have Monash IVF agreed to settle for $56 million, but it was reported that Monash IVF’s stock values dropped by 11% on the day they announced their agreement to settle the case.
Further, settlements that compensate victims reinforce accountability and redress, deterring similar actions. High-profile cases like Monash IVF raise public awareness, while reputational damage can act as a deterrent for other companies and institutions who wish to protect their brand and customer trust.
Settlements can also lead to increased regulatory scrutiny and changes in industry practices. Regulatory bodies may impose stricter guidelines and oversight in response to settlements, further deterring potential wrongdoers. It continues to be incumbent upon regulators within the states and territories of Australia to scrutinise the practices within the fertility industry.
Perhaps the biggest concern, however, is that the provision of assisted reproductive services continues to be a highly commercialised ‘industry’, which carries with it significant risks as a result. Such concerns are not new. For example, a decade ago, in 2014 it was reported that two major IVF clinics - Virtus and Monash IVF - had been floated on the stock exchange, and that excited financial analysts who observed that “people will pay almost anything to have a baby.”
People will pay almost anything to have a baby.
There have been numerous critical media analyses of the IVF industry since. Poignantly, in 2016 (8 years ago) the Four Corners episode ‘The Baby Business’ suggested IVF doctors were recommending treatments that were ‘expensive, unsafe and likely to be futile’. This was strongly denied by the Fertility Society at the time; but reflects the complaints brought against Monash IVF Group brought in 2020.
Generally, doctors in a wide array of medical fields receive fees or wages for their services, and this does not create conflict over their primary responsibility to patients.
However, the fertility industry, where clinics are owned and operated by large corporations, has a profit motive that can shape practices. Notably, Monash IVF’s Code of Conduct states that as a director or employee of, or doctor engaged by, the Company or its related entities a person must:
Recognise that (their) primary responsibility is to the Company and its shareholders as a whole.
Such requirements, and the potential for multi-million-dollar profits, has the potential (and has been seen) to skew where priorities lie for some. This can lead to dire consequences for people who seek access to treatment, donors of gametes, surrogate mothers, and the children born as a result of assisted reproductive treatment.
As such, while the Monash IVF agreement to settle the class action for $56 million may deter some future wrongdoers, there is ongoing call for regulatory oversight and caution. Publicly funded, not-for-profit services might also be given further consideration as a means to counter the negative impacts and risks that commercialisation of the fertility industry has raised.
