James Hardie Case

Topics: James Hardie, Asbestos and the law, Mesothelioma Pages: 14 (4739 words) Published: November 8, 2010
The Inquiry into the James Hardie transactions: whitewashing some very dirty linen

The Inquiry is over, the heads of agreement are signed and the CEO is appropriately publicly contrite — the matter of the James Hardie Group’s attempt to distance itself from $1.5 billion tort liabilities seems to have been resolved to everyone’s reasonable satisfaction. Should we move on, consigning委托 the episode插曲 to the dustbin of understandings of the world’s inevitable moral turpitude不可避免的道德沦丧?

If it were simply an episode一个小插曲 and if there were nothing to be learned from it other than that bad things happen and that some people have problems with being ethical, we might so consign it. But if a consideration of the episode reveals systemic issues in our legal and moral framework, there is a point to a thorough examination of what happened and what its implications are. And that is the case here.

Those issues are not, however, just the obvious明显 ones. Certainly the very idea of a board of directors setting about ensuring that their company avoid paying compensation to tort victims受害者 suffering a very nasty 讨厌disease is repugnant反感. As even Commissioner Jackson said:

To put it directly, JHI NV still has in its pockets the profits made by dealing in asbestos, and those profits are large enough to satisfy most, perhaps all, of the claims of victims of James Hardie asbestos. And, as I have said in other Chapters, the causes of actions now arising are by reason of negligent conduct过失行为 which took place during the period when profits were being made from asbestos.[1]

But that is obvious and commonplace屡见不鲜. There is far more to it; to see these issues it is necessary to delve into what happened.

The link between asbestos and disease is hardly novel. The Romans knew of it. Yet products made with asbestos were very useful, crucially for the James Hardie group, in brakes and building. After all, many things (including Coca Cola) are made with materials which are dangerous. Liability followed not because asbestos was dangerous, but for the negligence疏忽 in its use.

James Hardie himself opened the first Australian asbestos factory in 1916 and James Hardie Industries Ltd (‘JHIL’) commenced manufacturing in the 1920s. Manufacturing was shifted to a subsidiary, James Hardie and Co Pty Ltd (‘Coy’) in 1937. In 1963 a joint venture to make brake linings and friction products was set up as Hardie Ferodo Pty Ltd (‘HF’). The Ferodo group sold out in 1978 and Coy ceased停止 to manufacture asbestos products in 1987. Asbestos in brakes never resulted in substantial tort liability.

All these companies, and others to be mentioned later, change their names repeatedly in what follows. Some change their names three or four times. No-one enquires why, perhaps it is a habit of business people, but it certainly adds confusion to the events and enhances the perceived separation of the liable companies from the group. For clarity and perhaps out of a little perversity, I will stick with their original names and will indicate the final form of matters at the end. Readers of the Report of the Special Commission of Inquiry into the Medical Research and Compensation Foundation will note that Commissioner, D. F. Jackson Q.C. uses the names as appropriate at the time of each transaction and becomes a little confused himself in places, although he does produce a useful list of dramatis personae剧中人 at the start of his Report.[2]

Returning now to the story,[3] in the 1950s Australia was the highest per capita user of asbestos in the world. Asbestos was in common use until the 1970s and the James Hardie group held 70% of the market. A decline in the use of asbestos set in during the 1980s as the number of tort claims started to increase. These were, are and will be made by employees, people living near mines, workers in buildings built with asbestos, those involved in removing asbestos and so forth. As at March 2005, the claims...
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