The long road to a settlement

Thalidomide caused a number of birth defects

A small number of families was persuaded to settle on what would now be regarded as extremely unfavourable terms in 1968.

The remainder benefited from an out of court settlement in 1973 - the size of which was increased by the makers of Thalidomide, - Distillers - following pressure from the media and, ultimately, the company's own shareholders.

While the money paid to thalidomiders themselves amounted to �6m, a further seven payments of �2m each were to be paid into a charitable trust between 1973 and 1979.

Although the Thalidomide Trust benefited from another payment of �800,000 in 1979 in recognition of the fact that more people had been accepted as being damaged by the drug, inflation was already eroding the size of the fund.

The original payments were to rise by a maximum of 10% to take account of inflation.

But in the seventies inflation was running at well above that rate.

By 1995 it became clear that the trust would run out of funds unless it received extra money.

A campaign by some thalidomiders - including a hunger strike - was boosted when the trustees themselves admitted that the fund would not last beyond 2006.

Freddie Astbury has been campaigning for several years

But in 1999, worried that the fund would not last for the lifetime of its 450 or so beneficiaries, the trustees again sought additional money.

Diageo - the company formed by the merger of Guinness and Grand Metropolitan - agreed to extend its payments from 2009 to 2022 - by which time most of those affected by Thalidomide would be in their sixties.

In addition, the payments would be indexed linked so that their value would not be diminished by inflation.

Although the sums of money involved appear large, the reality for many of those affected by the drug was one of deteriorating health and financial insecurity.

Some people relied on payments from the trust as their sole source of income and were frequently denied benefits and other help.

What was more, tax had to be paid on payments from the trust.

The average income for a Thalidomide Trust beneficiary was around �13,000 a year.

A campaign group comprised of elected representatives of the beneficiaries decided to put pressure on the government to make payments exempt from tax, and to ask Diageo for a realistic settlement.

The campaigners persuaded the government to change the tax status of the trust last year, and then sat down to negotiate with Diageo.

The company seemed willing to listen and, while the current settlement was being worked out, made a one-off payment to thalidomiders of �4.5m in April this year.

The Thalidomide Trust's director, Martin Johnson, believes the latest offer is the most meaningful by far.

"Previous settlements were only focused on enabling the trust to do what it was doing," he said.

"This has arisen because the beneficiaries have been pointing out, carefully, that what was being provided was not sufficient to meet their needs."

"For the first time ever, Diageo is able to deal with a group of people who legitimately represent all of the beneficiaries."

Dr Johnson thinks that this most recent settlement - negotiated as it was by those affected by Thalidomide rather than on their behalf - will give Diageo considerable confidence that what it has offered will be a lasting and sustainable end to this long-running saga.

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