A NATIONAL lawyers’ association has applauded moves by the state attorneys-general to stop companies from avoiding their negligence liabilities by undertaking corporate restructures.
The Australian Lawyers’ Alliance last week announced that it supported the attorneys-general’s plan to back the News South Wales Government in its drafting of new laws to allow asbestos victims to claim compensation from James Hardie’s parent company.
The comments came after NSW Premier Bob Carr foreshadowed legislation to enforce James Hardie’s obligation to fully compensate victims. He said the laws would ensure victims could claim against the former James Hardie parent company.
As well, the federal Attorney-General Philip Ruddock welcomed Ministerial Council (MINCO) for Corporations agreement to support a negotiated settlement set to ensure that victims of asbestos related diseases are fully compensated by James Hardie.
“James Hardie must fulfil the commitment that it has already made to fund future compensation payments,” the parliamentary secretary to the treasurer and the corporation’s MINCO chairman said.
The Lawyers’ Alliance supported moves to prevent companies walking away from the potential devastation of future tragedies, it said. If necessary, corporations law should be overhauled so that “in circumstances like this, liability follows the controlling entity”, said John Gordon of the Australian Lawyers’ Alliance.
“An existing provision in the Corporations Act could be used as a model to allow victims to sue parent companies, or their successors, that try to avoid their responsibilities to people they have injured,” Gordon said.
He added that under the Act, people who have a damages claim against a company in liquidation can sue the company’s insurers. “The limiting of liabilities for companies was meant to be a device for people of enterprise to try new ideas without risking everything,” he said.
“It was never meant to be for companies like James Hardie that cynically make their millions and then seek to avoid the consequences of their actions by tipping a pittance into an entity and saying ‘sorry that’s all there is’ and sneaking out of the country,” Gordon said.
NSW Attorney-General Bob Debus last week requested support for the legislation from the states at the Standing Committee of Attorneys-General (SCAG) meeting in NZ.
In the event that the current negotiations between James Hardie, the ACTU and asbestos victims do not reach an acceptable conclusion, the MINCO has agreed in principle to consider options for legislative reform and to provide their vote, if necessary, on any legislation out of session.
As well, the Commonwealth will investigate options for extracting funds from James Hardie if it does not reach agreement with asbestos representatives.
The Australian Securities and Investments Commission (ASIC) has advised the Government that it is taking necessary steps to investigate the conduct of James Hardie in relation to the matters raised by the Jackson Inquiry.