The Japanese government will soon reach formal agreement to settle a massive class-action lawsuit involving people who contracted hepatitis B through childhood vaccination, expected to cost up to 3.2 trillion yen ($39 billion) in damages to compensate hundreds of thousands of victims.

The long-fought lawsuit, originally started in 1989, is a legacy of the time when needles and syringes were routinely reused to inoculate a number of children to save costs, a practice that persisted in Japan until 1988. Victims' groups estimate nearly half of the nation's 1.3 million hepatitis B patients and carriers had contracted the virus this way. The government's damages estimate is based on projections that a total of 33,000 patients and 400,000 carriers will seek compensation over the next 30 years.

The breakthrough in the case came when a national umbrella association of plaintiffs accepted on Saturday the terms of a settlement recommended by a district court in Hokkaido, one of the 10 locations where the case is being fought across the nation. The court recommended on Jan. 11 more generous payments to victims than those proposed by the government: 36 million yen ($440,000) for those with liver cancer or serious cases of cirrhosis. Furthermore, carriers with no symptoms will receive 500,000 yen, plus the costs of biannual checkups.

The plaintiffs had hoped their case would reach a successful settlement under the government of Prime Minister Naoto Kan, who had earned fame while serving as health minister in the mid-1990s for holding public-health officials responsible in a case involving HIV-tainted blood products that made many Japanese sick. In a speech delivered at the opening of a parliament session Monday, Mr. Kan pledged “sincere effort” to respond to the latest court settlement. The government announced its intention to settle the case after the Jan. 11 court recommendation.

Read the complete Wall Street Journal story, “Japan Nears Final Settlement on Hepatitis B Lawsuit.”