A bid by the manufacturer of Nurofen to avoid paying the highest ever corporate penalty awarded for misleading claims has fallen flat in the High Court.
Reckitt Benckiser was slapped with a $6 million fine in December, revised up from $1.7 million, for making misleading claims about its Nurofen Specific Pain products that were marketed as targeting back and period pain, among others.
Following the Full Federal Court's decision, Reckitt Benckiser applied for special leave and appealed the decision in the High Court of Australia on the grounds that the Full Court had erred in its assessment of consumer loss, and the finding that the initial penalty was manifestly inadequate.
On Wednesday, the High Court dismissed the special leave application with costs.
The final decision has brought to an end a near-year-and-a-half ordeal that began in December 2015 after the Full Court found that the manufacturer had engaged in misleading or deceptive conduct between 2011 and 2015 in claiming specific products were formulated to target specific pain, which the court found was not the case.
Each of the Nurofen Specific Pain products in question each contained the same active ingredient, 342 milligrams of ibuprofen lysine, which treats a variety of pain conditions, however is no more effective at treating one type of pain over another.
In April 2016, trial judge Justice Edelman ruled that Reckitt Benckiser pay $1.7 million for contravening Australian Consumer Law for making misleading representations about its products, in a decision that the Australian Competition and Consumer Commission (ACCC) appealed in May.
The ACCC claimed that a penalty of $1.7 million would not prevent other companies from engaging in similar behaviour, and that $6 million was more appropriate to send a strong message.
"[The] $1.7 million in penalties imposed on a company the size of Reckitt Benckiser does not act as an adequate deterrent and might be viewed as simply a cost of doing business,” ACCC Chairman Rod Sims said in May.
In December, the Full Federal Court upheld the ACCC's appeal, finding that the inital penalty of $1.7 million was not sufficient in light of the need for deterrence and the substantial consumer loss suffered.
“The objective of any penalty in this case must be to ensure that Reckitt Benckiser and other ‘would-be wrongdoers’ think twice and decide not to act against the strong public interest," Justices Jagot, Yates and Bromwich said of the decision.