Why US man may only get a fraction of $439m weedkiller lawsuit

The terminally ill groundskeeper who successfully sued Monsanto for US$289 million (NZ$439 million) may only see a fraction of that money.

Dewayne Johnson's lawsuit claimed the agribusiness giant's popular Roundup weedkiller was linked to his diagnosis of non-Hodgkin lymphoma.

His lawsuit claimed Monsanto failed to warn him about the deadly risks of its weedkilling products, which he became soaked in twice during workplace accidents two years before being diagnosed in 2014.

In a landmark court case, a San Francisco jury awarded him US$250m (NZ$380m) in punitive damages and around US$39m (NZ$59m) in compensatory damages.

But a 2017 Republican tax cut means he probably won't receive most of it.

Litigation settlements in the United States are now taxed at 100 percent, regardless of how much money goes toward legal fees, which can cost up to half the money awarded to the plaintiff in successful lawsuits.

The law change, which took effect this year, means no legal costs are deductible, and plaintiffs must pay taxes both on the money they keep and what they pay their lawyer.

A Forbes article analysed the costs of Mr Johnson's Monsanto lawsuit, and calculated that he would lose US$92.5m (NZ$139m) of his awarded money, leaving him with just US$52m (NZ$78m) after tax.

That's not counting the money he might lose when Monsanto appeals the verdict, which could again significantly reduce the award.

Monsanto can deduct the full $289m (including legal fees) from its tax bill, because business expenses are still tax-deductible under the new law.

Slate has argued that the purpose of the Republican tax law change is to discourage people from suing by making the process much more expensive.

Newshub.