Attempt at Damage Limitation by Major Asbestos Defendant  

by Laurie Kazan-Allen



In a Monty Pythonesque effort to turn disgrace into victory, the Australian company of James Hardie Industries, a major defendant in Australian asbestos litigation, announced on July 14, 2004 proposals to top-up the assets of the Medical Research and Compensation Foundation (MRCF), a body set up in 2001 to ring-fence Hardie's asbestos liabilities. Far from being a humanitarian gesture, the creation of the MRCF, a woefully underfunded organization, was an integral part of Hardie's corporate relocation to the Netherlands, a move designed to put thousands of miles between Hardie's Australian asbestos victims and the company's major assets.

Details which have emerged during an Australian commission of inquiry into the MRCF's $1.5 billion shortfall have created a tidal wave of bad publicity; even more worrying for Hardie is the possibility that in September, 2004 the commission might rule that despite its move off-shore, James Hardie is liable to pay claims brought against its two asbestos subsidiaries. The commisison could also instigate criminal proceedings against James Hardie directors.

The July 14 announcement, made by Hardie's Chief Executive Peter MacDonald, offered:

“the provision of additional funding to enable an effective statutory scheme to be established to compensate all future claimants for asbestos-related injuries caused by former James Hardie subsidiary companies.”

This offer is characterized as “too little, too late,” by Robert Vojakovic, President of the Asbestos Diseases Society of Australia, a group which represents thousands of Australian asbestos victims. President Vojakovic welcomed Hardie's acknowledgment that “it must pay back the money it took out of Australia” but was scathing at this attempt to use New South Wales law reforms to cap compensation payouts. He said:

“The issue is not about tort reform, but about corporate law reform to call to account corporate cowboys like the James Hardie management. It is well overdue that James Hardie stop looking for new angles and excuses. After 100 years of corporate misfeasance, it is time to act responsibly.”

The Australian Council of Trade Unions agrees with this assessment. On July 15th, its Assistant Secretary Richard Marles said:

“The scheme it (Hardie) proposed would shortchange the many thousands of Australians who will ultimately die as a result of exposure to work-related asbestos. The notion that we should limit access to proper compensation for the death of so many people is a disgrace… James Hardie is seeking to turn its own wrongdoing to an advantage by proposing to drastically limit the amount it would have to pay its victims and to strip away legal rights.”


July 15, 2004



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