Billion-dollar companies who fall foul of the law, or billionaires who fall foul of a spouse, can result in stratospheric legal settlements. In the case of class actions, financial payouts can be a major way to provide recompense and right wrongs.
We investigate some of the world’s most expensive legal settlements, the circumstances surrounding them, and of course, how much they paid out!
Here is our top 10 list of the most expensive settlements in history… costly class actions, pharmaceutical payouts and extravagant divorces.
Class Actions
1. Big Tobacco’s Master Settlement Agreement | $206B
Here is a class action to send chills down the spine of any vaping company. After years of disputes and lawsuits, Big Tobacco had its day of reckoning. A class action was brought against all major tobacco companies across more than 40 US states. Leading the charge was Mike Moore, Attorney General of Mississippi. Moore argued that his state should not be liable for the costs of smoking-related disease. It was an argument that had long failed, with tobacco companies successfully asserting that smokers had ‘chosen to smoke’, foiling lawsuits brought by smokers and their families.
This landmark case resulted in a USD206B settlement, the largest civil litigation settlement in US history. Under the terms of the settlement agreed upon in 1998, the tobacco industry was required to part with billions over 25 years. The funds were assigned towards smoking-related projects.
2. BP's Deepwater Horizon oil spill | $18.7B
Oil spills can spell the end of an ecosystem. BP’s disastrous Deepwater Horizon spill was one of the worst. In April 2010, gas leaked into an oil well during drilling operations, causing a catastrophic oil rig explosion that killed 11 crew members.
Five million barrels of oil cloaked the Gulf of Mexico over the next 87 days, impacting marine life and the communities that depended on the Gulf. BP was hit with litigation that continues until this day. To date, this has resulted in settlements totalling more than USD18.7B.
3. The VW emission scandal (aka Dieselgate) | $14.7B
This was greenwashing on an industrial scale. Volkswagen’s explosive revelation in September 2015 that it had falsely claimed its diesel-fuelled vehicles met environmentally friendly standards sparked global outrage and litigation. A San Francisco judge awarded a $14.7B settlement between the embattled auto manufacturer and owners of almost half a million VWs. Litigation continues in other jurisdictions, including the UK, so it’s likely this falsehood will cost VW dearly for years to come. It is estimated that the scandal has cost VW over $21B to date.
4. Dutch Fortis Bank settlement | $1.3B
Europe delivered a sizeable settlement following the breakup and dissolution of Benelux-centred financial services company Fortis. Imperilled by the global financial crisis, Fortis was forced to make a decision that adversely impacted its shareholders.
Subsequent litigation was complex and time consuming. A decade after the GFC, the Amsterdam Court of Appeal approved a EUR1.3B group action settlement on behalf of Fortis shareholders. The settlement was a victory for shareholder litigation and was one of the biggest in Europe.
Pharmaceutical Settlements
5. Cardinal Health, McKesson, AmerisourceBergen, Johnson & Johnson | $26B
The opioid epidemic that swept the US has been the focus of significant litigation. In early 2022, this culminated in a landmark settlement with the three largest U.S. drug distributors, and pharmaceutical producer Johnson & Johnson. The settlement, worth $26B, aimed to resolve around 3000 lawsuits filed by state and local governments. One of the main issues was that medical practitioners were prescribing opioids when patients did not require such treatment, leading to sustained and serious addiction, as well as death.
"Because of the money, there will be people alive next year who otherwise would have died," North Carolina Attorney General Josh Stein, a lead settlement negotiator, told Reuters.
6. Purdue Pharma | $8.344B
Staying with the opioid crisis, Purdue Pharma was involved in a scandal so significant, it was dramatised in the streaming series, Dopesick. Michael Keaton played a doctor who was misled by Purdue Pharma’s marketing to prescribe opioids - leading, in turn, to his own addiction. Purdue Pharma’s opioids included OxyContin, Butrans and Hysingla, and resulted in Purdue pleading guilty to fraud and kickback conspiracies.
Under the late 2020 plea agreement, Purdue Pharma was liable for the largest penalties ever levied against a pharmaceutical manufacturer. This included a criminal fine of USD3.544B, USD2B in criminal forfeiture and USD2.8B in civil liabilities.
“Purdue admitted that it marketed and sold its dangerous opioid products to healthcare providers, even though it had reason to believe those providers were diverting them to abusers,” Rachael Honig, First Assistant U.S. Attorney for the District of New Jersey, said in a Justice Department statement. “The company lied to the Drug Enforcement Administration about steps it had taken to prevent such diversion, fraudulently increasing the amount of its products it was permitted to sell. Purdue also paid kickbacks to providers to encourage them to prescribe even more of its products.”
7. GlaxoSmithKline | $3B
Before the age of opioids, pharmaceutical companies were well-versed in the playbook of over-prescribing prescription drugs. Back in 2012, GlaxoSmithKline pleaded guilty to failing to disclose safety information in its unlawful promotion of prescription drugs. This included off-label promotion, kickbacks to medical physicians for prescriptions, deceptive marketing, misbranding, and falsifying drug prices to underpay rebates. This resulted in a settlement of $3B, across criminal fines, civil liabilities, and forfeiture.
Divorces
8. Bill & Melinda Gates | $6B+
Bill and Melinda Gates were long renowned as a philanthropic power couple, funnelling their fortune into fighting malaria, and aiding other causes throughout the world. Their impact was significant and for decades Bill Gates has reigned supreme on the list of richest people. Bill and Melinda’s marriage lasted 27 years with their separation announced via Twitter on May 2021. A current estimate (8/8/23) by Forbes of Bill Gates’ fortune sits at USD117.5B.
When power couples consciously uncouple, divorce settlements can be astronomical. While the final figure was never officially disclosed in court documents, reports suggest that Melinda Gates gained more than $6B in stocks alone.
9. Jeff Bezos & MacKenzie Scott | $38.3B
When tech titans divorce, divorce lawyers rejoice. This is at least the case in the United States, when the fortunes of the world’s richest entrepreneurs are at stake. When Amazon founder Jeff Bezos parted ways with MacKenzie Scott, he also parted with USD38.3B in Amazon stock at the time of settlement. Married for 25 years, MacKenzie filed for divorce in September 2022, the couple shared four children. While these settlement figures dwarf the GDP output of many nations, the payout far from bankrupted Bezos, whose net worth is estimated by Forbes to be USD162.5B as at the 8/8/23.
10. Rupert Murdoch & Anna Maria Mann | $1.7B assets + $110M cash
Not all wealth comes from tech, as media magnate Rupert Murdoch knows all too well. Having made his fortune growing NewsCorp globally, Rupert Murdoch is a divisive public figure. Known as Kingmaker in some circles, Murdoch’s ability to influence voting populations has made him as much maligned as he is celebrated. A four-time divorcee, Murdoch might equally be regarded as an expert in extravagant divorces. However, it was his divorce to his second wife, Anna Maria Mann, that made headlines in 1999. Married for 31 years, the union was Murdoch’s longest-lasting, and together, they share three children.
When Murdoch pulled the plug, he is reported to have parted with $1.7B in assets including $110M in cash. Wasting no time, he married his now third ex-wife, Wendi Deng, just 17 days after his divorce.
Not all disputes end so expensively, but when they do, the settlements make headlines. Whether you work in class action litigation or family law, these are the cases that can make a career and cement formidable reputations.