The Memo: Johnson & Johnson talcum powder lawsuit hits the English courts

Papers are being prepared for the High Court this month in what is expected to be one of the largest pharma product class actions in England, brought by cancer survivors and bereaved families. Over 3,500 claimants are taking Johnson & Johnson, one of world’s largest pharma companies, to court over alleged links between asbestos-contaminated talcum powder and cancer.  

It's not the first time Johnson & Johnson has faced such allegations. In fact, in the United States, over 62,000 have sued and the company is set to pay out at least $13 billion, despite maintaining that its products are safe and haven’t caused cancer. The company’s new subsidiary Red River Talc will be handling these payouts, after it was incorporated in August 2024 to take on the parent company’s talc-related liabilities following the subsidiary’s Chapter 11 bankruptcy declaration in Texas.  

Effectively, as part of this ‘reverse merger,’ the parent company leaves all legal and financial liability to its purpose-built subsidiary. The court will then supervise a reorganisation of the subsidiary assets and debts, thus protecting the parent company’s other assets. This is a legal move known as the ‘Texas Two-Step’ (also a popular western dance!) and has been used by companies such as Purdue Pharma in connection to opioid crisis claims, and by Georgia-Pacific, CertainTeed and Koch over asbestos-related liabilities. The bankruptcy court system has also been used in class action settlements for victims of sexual abuse (by the Boy Scouts of America, for example), and for victims of the wildfire caused by Pacific Gas & Electric.Johnson& Johnson’s ‘Texas Two-Step’ is intended to resolve more than 99% of its current lawsuits and will prevent future lawsuits from being filed. Around 83% of the current claimants support the plan, exceeding the 75% approval threshold required in the US. However, the case is still ongoing, with a hearing on 18 February to determine whether the bankruptcy plan will move forward. 

Here in the UK, meanwhile,the matter is only just beginning, with specialist claimant law firm KP arguing that Johnson & Johnson had knowledge that its products were contaminated with asbestos from as early as the 1970s. The firm argues that Johnson & Johnson failed to warn consumers and continued to sell talc products in the UK until 2022, even though they had replaced such products with cornstarch in the US back in 2020. KP, like many other claimant firms, runs on a no-win, no-fee basis, which appears to be a risk-free option but it’s worth noting that claimants typically sign away about 30% of any compensation.  

As mentioned above, class actions are part of the tapestry of the US legal landscape, and are very much growing in the UK. Examples range from the Post Office Inquiry and Dieselgate, to the Mariana Dam crisis and competition claims against Mastercard and Google. This increase is not only due to the growth of US firms in the UK but has also been caused by changes in funding, such as conditional fee agreements, damage-based agreements and increasingly more common litigation funding agreements. For example, Fair Civil Justice has reported an increase from 16 to 73 litigation funders in the UK since 2010, which is reflected in a leap from £6 million to a whopping £2.2 billion.It’s worth bearing in mind that the Labour government is conducting a review of the litigation funding market, which is expected to conclude in the summer. 

For claimants such as those in the Johnson & Johnson case, however, legal action is often more about holding organisations accountable for their actions. It’s a way of concentrating resources and funding for incredibly lengthy and expensive lawsuits which would be unaffordable for the average claimant.