SYDNEY, AUSTRALIA—An Australian woman born without arms and legs after her pregnant mother took the anti-morning sickness drug Thalidomide has reached a multimillion dollar settlement with the medicine’s British distributor, her lawyer told a court Wednesday. The German maker of the drug refused to settle.

Lynette Rowe, 50, of Melbourne, is leading a class-action suit on behalf of children born with congenital birth defects linked to Thalidomide. The drug was given to pregnant women in the 1950s and 1960s as a treatment for morning sickness, but was yanked from the market in 1961 after it was linked to birth defects. It led to deformities in thousands of babies across the world.

Rowe sued three parties: German drugmaker Grunenthal, U.K.-based Distillers Company (Biochemicals) Ltd. — which sold the drug in Australia — and Diageo Scotland Ltd., the successor company to Distillers. The lawsuit claims that Grunenthal should have known Thalidomide was linked to birth defects when it was on the market.

In Victoria state Supreme Court on Wednesday, Rowe’s lawyer, Peter Gordon, said his client had reached a settlement with Diageo and Distillers while Grunenthal declined to settle.

Exact terms of the settlement were confidential, but Rowe’s lawyers said it was several million dollars. The lawsuit asked for compensation for the victims’ pain and suffering, lost wages and future medical care.

“This is a great outcome for a wonderful family,” Gordon said in a statement. “The amount of the settlement will remain private but I can say it is a multimillion dollar amount and will be sufficient to provide a very good level of care for Lyn for the rest of her life.”

More than 100 others who are part of the class action will also have their claims heard by Diageo, Gordon said. Rowe’s lawyers will ask for the trial against Diageo and the other defendants to be delayed from October until August 2013 to allow the company time to settle the pending claims, Gordon said.

Rowe smiled as she left the courthouse and said she was pleased others harmed by Thalidomide will now have the chance to seek compensation from Diageo.

“It is great that my case will bring about good things for other people too. It shows you don’t need arms and legs to change the world,” Rowe said in a statement. “Like I always say: see the person, not the disability.”

In a statement, Grunenthal said it would continue to defend itself against the litigation.

“Grunenthal maintains that its actions were consistent with the state of scientific knowledge and the prevailing standards for pre-marketing and testing of the pharmaceutical industry in the 1950s,” the company said. “Grunenthal believes that it acted responsibly in the development of Thalidomide, and greatly regrets the consequences of the Thalidomide tragedy.”

Diageo representatives did not immediately respond to a request for comment.

Thalidomide lawsuits have been filed across the world over the years, and all three companies have previously paid out settlements, many for millions of dollars. In 2010, the British government officially apologized to people hurt by the drug, after earlier agreeing to pay 20 million pounds ($31 million) to Thalidomide’s victims.