LEGAL COMPLEXITIES have been blamed for the postponement of the agreement to fund compensation for victims of James Hardie’s asbestos products.
The NSW Government and James Hardie Industries have negotiated a new timetable for the agreement, which makes the first year’s payment to victims one month later than originally expected. The new process for resolving asbestos compensation claims is now intended to start on 1 July this year.
Announced last week by NSW Premier Bob Carr, the change of date was caused by “the legal complexities involved in developing a corporate structure that will be able to deliver funding for 40 or more years”, the Premier said in a statement.
As well, delays were caused because James Hardie is taking two months to provide the Government with a first draft of the Agreement. Now that the Principal Agreement is expected to be signed in early June, when James Hardie will call a meeting of its shareholders.
The Principal Agreement involves James Hardie making settlement amounting to $1.5 billion over the next 40 years. The company announced last week that, considering the “vast array” of legal, accounting, structural and social issues, it is not surprising there will be a short delay. It added that “this should not be taken as a sign of diminution of will or effort on behalf of any of the parties involved”.
In a statement, James Hardie stated that it “still anticipates that the shareholder meeting to consider approving the proposed asbestos compensation arrangements will be held in late July 2005”.
“If approved, it is expected that payments to the Special Purpose Fund would commence in late August/early September 2005,” it said.
Legislation will be introduced in early June to implement aspects of the Principal Agreement. The NSW Government is also preparing legislation to implement the Review of Legal and Administrative Costs in Dust Diseases Compensation Claims. The Premier has announced that draft regulations will be released for public consultation in mid April, while amending legislation will be introduced in July.
In its statement, James Hardie said it believed that last week’s announcement would not disadvantage legitimate claimants. But, “in the unlikely event that the [Medical Research and Compensation Foundation’s (MRCF)] existing sources of funds prove to be inadequate to meet proven claims prior to the finalisation of the Principal Agreement in accordance with the updated timetable, James Hardie will assist the MRCF to obtain interim funding”.
It said that before it takes the proposal to shareholders, further key steps needed to be completed, including the completion of enabling legislation and regulations and an Independent Expert Report. As well, an explanatory memorandum needs to be sent to shareholders and board and financier approvals need to be made.