Johnson & Johnson (NYSE:JNJ)’s bid to settle thousands of lawsuits that claimed the company’s talcum powder caused cancer is among the largest ever when adjusted for inflation.
Having agreed to pay around £6.8bn (US$8.9bn) to settle the cases in April, J&J’s proposed pay-out marks the largest since the early 2000s and the eighth highest of all time, according to Arizona-based law firm High Rise Financial.
BP PLC (LSE:BP.), Volkswagen Group (XETRA:VOW) and General Motors Company (NYSE:GM) are among other large names to appear on the list, having been among the firms ordered to pay settlements which sit among the world’s top ten based on today’s inflation.
Top ten historical settlements in real terms:
1 - Tobacco Master - £292.8bn
Signed by the four largest US tobacco companies of the time, Philip Morris International Inc (NYSE:PM), R. J. Reynolds, Brown & Williamson and Lorillard agreed to pay the equivalent of £157.4bn in 1998, after having failed to disclose the adverse effects of smoking.
2- Opioid epidemic - £22.2bn
Agreed to by Johnson & Johnson (NYSE:JNJ), AmerisourceBergen Corp. (NYSE:ABC), Cardinal Health Inc (NYSE:CAH), and McKesson Corporation (NYSE:MCK) in 2021, firms had been found to have contributed to the opioid crisis in America through their business practices.
3- BP Gulf of Mexico oil spill - £21.3bn
Having spilled millions of barrels worth of oil into the seas of the Gulf of Mexico in 2010, BP faced the third-largest settlement ever for the significant environmental and economic damage caused.
4 - Volkswagen emissions scandal - £14.2bn
After rigging millions of vehicles to cheat on emissions tests, VW was ordered to settle up with customers in 2016 who had been misled by the diesel emissions scandal.
5 - Enron securities fraud - £7.7bn
Illegal accounting tricks to manipulate the commodities and services firms’ share price to overcome the effects of rising debt saw Enron grant shareholders billions in 2008.
6 - WorldCom accounting fraud - £7.2bn
2005 saw WorldCom being found to have inflated the value of its own assets, in a case which ultimately saw ex-chief executive Bernard Ebbers jailed and the telecommunications firm ordered to pay billions to investors who lost money.
7 - General Motors auto defect - £6.8bn
In 1999 the auto manufacturer was found liable for a defect in its Chevrolet Malibu and ordered to pay six severely burned victims after their car exploded in a rear-end collision two years earlier.
8 - J&J talcum powder - £6.8bn
Agreed to this year, J&J faced thousands of lawsuits over allegations its talcum powder contained carcinogens and caused cancer.
9 - Fen-phen diet drugs - £5.0bn
US firm HomeProducts was hit by the settlement in 2000, after its diet drug fen-phen was found to be linked to fatal cases of heart valve damage.
10 - Dow Corning (NYSE:GLW) breast implants - £4.5bn
Links to some 170,000 ill patients saw Dow Corning (NYSE:GLW) Corp resolve lawsuits in 1998 relating to its breast implants, marking the tenth-largest settlement ever.
Though the settlements were indeed worth less at the respective times of signing, rising inflation since the earlier cases were settled in the late nineties has seen their real terms values soar.
“This new perspective highlights the power of civil law in holding massive corporations to account and compensating victims,” a spokesperson for High Rise Financial commented.
“While many of these companies still operate today, these scandals and settlements would spell the end for several, and all would suffer significant reputational damage.”
Marking the most recent, J&J’s case to settle cases over its talcum powder is yet to be fully approved, with the proposal set to cover all current and future claims over the course of the next 25 years.