Asbestos victims may be priced out of Hardie inquiry

Bob Briton

Lawyers for asbestos disease victims and unions in NSW may be 
denied the opportunity to put their case before the James Hardie 
inquiry, following an announcement from the State Government that 
it would not grant them legal aid.

Last week a spokeswoman for NSW Premier Bob Carr denied claims 
from representatives of the victims' coalition that they had 
previously been given assurances from the government that they 
would receive assistance with legal costs. "As far as I am aware 
there has been no commitment to give aid", she said.

The Victorian Government has agreed to provide $50,000 in legal 
aid to the Victorian asbestos victims' group.

The Carr Government decision ignores the question as to how the 
plaintiff law firms will be paid. Slater and Gordon and another 
firm, Turner Freeman, must now decide whether they can afford to 
continue to appear on behalf of unions and victims at the 
inquiry.

The firms have already racked up $500,000 in unpaid bills. 
Meanwhile, James Hardie has revealed that they are paying $1 
million a month in legal fees as part of their efforts to keep 
their distance from compensation claims arising from asbestos-
related illnesses.

The special commission of inquiry has already heard a lot of 
scandalous detail about the actions of James Hardie in the lead-
up to its establishment of the Medical Research and Compensation 
Foundation (MRCF) — the body left in charge of dealing with 
compensation claims. The funds for the foundation came from the 
stripping of the assets of Amaca and Amaba. These two companies 
were set up by James Hardie to take over its asbestos products 
interests in 2001. By that stage James Hardie had relocated its 
headquarters far away, in the Netherlands.

Last week, David Robb, a lawyer from Allan Allan and Hemsley, 
told the Commission of his concerns at the time of Hardie's 
decision to cut and run that directors of the building products 
giant may have been engaged in misleading conduct. On the eve of 
the establishment of the MRCF, Mr Robb and his superior rang 
Hardie's managing director Peter Mcdonald. They had discovered 
the estimates of liabilities calculated by the actuarial company 
engaged by the former asbestos manufacturer did not include the 
data from claims during the most recent eight months.

In that period, the number of claims had increased substantially. 
Mr Robb said that Mcdonald had given them assurances that all the 
asbestos liabilities would be fully funded. The report from 
Trowbridge Deloittes (engaged by Hardie) that resulted from that 
data said that start-up funding of $300 million would be 
sufficient. More realistic reports now estimate a shortfall of 
$1.3 billion or even $1.6 billion, according to KPMG Actuaries.

At one point, Inquiry head David Jackson QC asked Hardie chief 
Peter Macdonald to set aside the legal arguments for the moment 
and to consider "commercial morality" of the steps taken in 
setting up the MRCF. Macdonald "replied" by saying that the 
company's board believed that the funding would be adequate.

Paul Bastion, NSW Secretary of the Australian Manufacturing 
Workers Union, gave vent to the anger building in the community 
with comments made in Workers Online last week:

"Evidence to the Jackson Inquiry has been nothing short of 
scandalous. A lot of very well paid, respected people have made 
money out of asbestos. Now they're going to a lot of trouble to 
avoid paying compensation to ordinary people whose lives have 
been destroyed."