Fuschillo v Johnson & Johnson (No 2): Costs Budgeting in Group Litigation [2026]
Costs Budgeting — 2026-07-24
Mrs Justice Hill ordered costs budgeting in the Johnson & Johnson Baby Powder group litigation, holding that six-monthly costs reports would provide transparency without control. The court also allocated Opus 2 charges and addressed the QOCS risk of an abuse-based strike out.
Overview
Date: 24 July 2026
Judge: Mrs Justice Hill DBE
Court: High Court of Justice, King's Bench Division
Hearing date: 20 July 2026
Citation: [2026] EWHC 1925 (KB)
Nature of Proceedings: Case management of group litigation concerning mineral talc-based Baby Powder, including strike out, staged issues, claimant information, costs and costs budgeting
Key Issues:
- Whether costs budgeting should apply to substantial personal injury group litigation
- Whether six-monthly costs updates would provide sufficient control
- How the parties should bear the cost of the shared electronic platform
- The costs of an amendment application
- The QOCS risk attached to striking claims out as an abuse of process
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Why the Case Matters
In Janet Fuschillo and Others v Johnson & Johnson and Others (No 2), the High Court, King's Bench Division, held in 2026 at [2026] EWHC 1925 (KB) that this substantial personal injury group litigation should be subject to costs budgeting. Mrs Justice Hill rejected six-monthly costs updates as insufficient control, directed how the parties should bear the costs of an Opus 2 electronic platform, and adjourned a strike-out application whose abuse limb carried a risk to the affected claimants' QOCS protection.
The decision is useful beyond this group litigation. It shows why a claim falling outside the automatic costs management regime may still merit active budgeting. It also distinguishes the transparency provided by costs updates from the control achieved through costs management.
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The Proceedings
The claimants seek damages in negligence and deceit. They allege that exposure to mineral talc-based Baby Powder carrying Johnson & Johnson branding caused malignant mesothelioma or ovarian cancer. The court made no finding in this judgment on those allegations.
Two claim forms issued in October 2025 included 1,964 claimants. A third claim form filed on 22 May 2026 included a further 183 claimants. A Group Litigation Order was made on 10 June 2026, followed by the establishment of the Group Register and Register of Dependants on 19 June 2026 and service of the Generic Defence on 26 June 2026.
By the case management conference on 20 July 2026, 818 claimants appeared on the Group Register. Of the claimants on the October claim forms, 1,052 had been or would be advised to discontinue because they did not meet the Standard Minimum Requirements, had chosen to proceed in Scotland, or wished to discontinue for other reasons. Around 40% of that group had confirmed instructions to discontinue. The main change concerned ovarian cancer claims, which the claimant legal team had limited to high-grade serous ovarian cancer.
The hearing addressed the defendants' strike-out application, the structure of the litigation, directions for a preliminary issues trial, Supplemental Schedules of Claimant Information and costs management.
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The Staged Approach and Its Costs Context
The parties agreed that the litigation should proceed in stages. Stage 1 will determine two common issues: the constitution of Baby Powder, described in the judgment as the Contamination issue for convenience, and Generic Causation. The court refused to include the Knowledge issue at Stage 1. That issue required a wider factual enquiry, would add about four weeks to a trial otherwise estimated at six to eight weeks, and offered limited value at that stage. By contrast, a decision on contamination or generic causation could dispose of the claims.
The scale of the directions helps explain the budgeting decision. The disclosure process includes material disclosed in United States litigation, further bespoke disclosure and expert evidence across seven disciplines. Expert reports will be served in two waves. Case management conferences are listed through 2027, with the preliminary issues trial listed from 14 February to 7 April 2028 and oral closing submissions from 22 to 25 May 2028.
The timetable was largely agreed. That agreement later answered part of the claimants' concern that costs budgeting would lead to repeated disputes about budget variations.
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Costs Budgeting Was Ordered
The Parties' Positions
The defendants asked the court to undertake costs budgeting so that it could control expenditure and keep the parties' costs proportionate and reasonable. They relied on experience in other group litigation, including Pan NOx Emissions Litigations [2024] EWHC 1728 (KB), where the costs incurred and estimated had attracted strong criticism.
The claimants submitted that budgeting was premature and might itself be disproportionate. They said it would front-load costs and could generate contested variation applications. They relied on the exclusion at CPR 3.12(1)(b) for an unquantified or partly unquantified monetary claim valued at £10 million or more. They also referred to the Business and Property Courts pilot concerning claims over £1 million. Their alternative was to provide costs updates every six months.
Transparency Was Not Enough
Mrs Justice Hill held that costs budgeting was proportionate given the sums at stake and the likely level of costs. Six-monthly reports would show the court what had already been spent, but would not allow the court to control that expenditure before it was incurred. The judgment adopted counsel's description of the problem:
> “after the horse has bolted”
The distinction at [75] is important. Regular reporting may alert the court to mounting costs, but a report does not set an approved framework for future expenditure. In litigation of this size, the court considered control necessary as well as visibility.
Practice Direction 3D Supported Active Management
At [76], the court relied on paragraph 2(f) of Practice Direction 3D. It provides that an order requiring costs budgets, with a view to a costs management order, may be particularly appropriate in personal injury and clinical negligence cases valued at £10 million or more. The court held that this litigation fell within that description.
The claimants' reliance on the value-based exclusion therefore did not decide the issue. The court considered the nature and scale of the proceedings and made a positive case management decision to budget the costs.
Variation Disputes Did Not Justify Dispensing With Budgets
The parties had largely agreed the directions through to trial. The court therefore saw no reason to expect a greater risk of disputed variations than in other substantial litigation. In any event, the possibility of later variation disputes was not a persuasive reason to dispense with budgeting.
Mrs Justice Hill consulted Senior Master Cook, who agreed that budgeting should take place. Senior Master Cook was expected to assist with the exercise at the November 2026 case management conference. The defendants were given 28 days to make any submission that a costs judge should undertake the exercise instead.
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Electronic Platform and Amendment Costs
The parties agreed that an Opus 2 electronic platform was appropriate for disclosure and bundle preparation, but disagreed about the hosting costs. The defendants proposed that the claimants should bear them. The claimants argued that both sides would use the platform and should share the expense.
The court accepted the claimants' position at [70]. Opus 2 hosting costs are to be borne jointly by the claimants and defendants and will be costs in the case. Any individual or per-user access charge is to be borne by the party seeking that access and will also be costs in the case.
The parties resolved the costs of the claimants' amendment application without a contested ruling. The costs of the successful application and the costs incidental to the amendments were agreed to be costs in the case. The judge recorded that this course saved court time.
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Strike Out, Discontinuance and QOCS
The costs importance of the strike-out application lies in the ground advanced and its possible effect on QOCS. The defendants sought a progressive strike out of claims that did not meet the Group Litigation Order's Standard Minimum Requirements. They criticised the issue of claims before the medical diagnosis was clear and the failure to mention, during the GLO application, that many claimants would not qualify for the group.
Mrs Justice Hill accepted that the change in the claimant cohort went beyond the modest adjustments which can occur in group litigation. She did not find an abuse of process under CPR 3.4(2)(b). There was no evidence that the claimants' solicitors had deliberately used the court's process for an improper purpose, had issued claims they did not intend to pursue, or had delayed excessively in addressing discontinuance.
At [19], the judge observed that striking the claims out as an abuse carried a risk that the affected claimants would lose QOCS protection under CPR 44.15(b). The judgment does not decide the costs consequences of each later discontinuance. Its QOCS point concerns the proposed abuse finding and the risk attached to that route.
The court also held that a power to strike out under CPR 3.4(2)(c) was technically available because claimants outside the GLO could not benefit from dispensations concerning individual schedules of loss, medical reports and initial disclosure. The court declined to exercise that power at this stage. A managed process of discontinuance offered a proportionate alternative.
The claimants' solicitors must identify claims for discontinuance and provide monthly updates before the November 2026 case management conference. Claims which still fail the requirements and have not been discontinued may then be vulnerable to strike out. The defendants' application was adjourned to that hearing.
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Practical Implications
For Costs Lawyers
1. Allow for a discretionary budgeting order in high-value claims. A value-based exclusion from the automatic costs management regime does not end the enquiry. The court may still order budgets where the type, value and likely cost of the proceedings make control appropriate.
2. Separate costs reporting from costs control. Periodic updates show incurred expenditure. They do not give the court the same control over future costs as an approved budget and costs management order.
3. Budget shared litigation infrastructure clearly. Hosting charges, user charges and document-platform costs should be identified separately. The order in this case allocates shared hosting jointly, while each party bears its own per-user access charges, with both categories treated as costs in the case.
4. Build the budget around the ordered litigation structure. The staged trial, bespoke disclosure, expert disciplines, reporting waves and listed hearings give the parties a concrete basis for phasing and estimating future costs.
5. Keep the QOCS analysis tied to the strike-out ground. The observation at [19] concerns the risk created by a strike out for abuse under CPR 44.15(b). It should not be presented as a general ruling on every discontinuance in the group.
For Litigation Practitioners
1. Review claimant eligibility before and after issue. A large change in the claimant cohort created satellite applications, monthly reporting duties and possible later strike out. Medical evidence and the GLO entry requirements need continuing review.
2. Address costs management while directions are being designed. Agreed directions can make the budgeting exercise more manageable and reduce uncertainty about future phases and variation applications.
3. Resolve platform-cost allocation in the order. A shared platform does not answer who bears hosting or access charges. The order should distinguish common infrastructure from party-specific use.
4. Treat the procedural route to disposal as a costs decision. Discontinuance, strike out for abuse and strike out for rule breach may carry different costs consequences. The chosen route needs to be considered alongside QOCS before an order is sought or agreed.
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Conclusion
Fuschillo (No 2) shows active costs management in a high-value personal injury group action. The likely expenditure, the long timetable and the breadth of disclosure and expert work justified budgets even though the claimants relied on provisions excluding claims of this value from the automatic regime. Six-monthly reporting would have provided information after costs had been incurred, which the court regarded as inadequate.
The decision also provides a practical allocation of electronic-platform charges and records an agreed costs-in-the-case order for amendment costs. Its QOCS discussion requires care. The court identified a risk if claims were struck out as an abuse, but did not determine the costs outcome of future notices of discontinuance.
The November 2026 case management conference will be the next important costs stage. The budgets are expected to be addressed with assistance from Senior Master Cook, subject to any submissions that a costs judge should undertake the exercise.
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Citation: Janet Fuschillo & Ors v Johnson & Johnson & Ors (No 2) (Strike Out, Staged Approach and other issues) [2026] EWHC 1925 (KB)
Full judgment available at: The National Archives
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