Asbestos claims close in on $1 billion in Australia

By Annabel Crabb

Political Reporter

January 12, 2004

The amount is up sharply on previous estimates because of escalating payouts, the emergence of more cases than expected and a recent High Court case expanding the areas of government liability.

Federal ministers have convened a special inter-departmental committee to decide how to handle the problem, and expect to receive recommendations soon.

A spokesman for Finance Minister Nick Minchin yesterday said the Government was not ruling out a national legislative approach designed to contain liability.

"We recognised in the last few years that this was going to become a problem," he said. "We will be looking at all the options through the inter-departmental committee report."

Large companies with substantial asbestos liabilities, including the building company James Hardie Industries, have been lobbying the Government to adopt a national approach to asbestos claims, and take action to quell the rising tide of compensation payouts.

James Hardie established a special $300 million foundation to handle its own claims in 2001, but has since signalled that it will make no further contributions, amid reports that the fund will run out within years.

The Australian National Audit Office, in the newly released Audits of the Financial Statements of Australian Government Entities, reports the revised liability figure, putting it at $945 million, a sharp increase from previous estimates of about $300 million...

...One reason for the recent re-evaluation of Commonwealth liabilities, it is believed, is that payouts administered by the NSW-based Dust Diseases Tribunal have been increasing, and litigants from other states have been taking their cases to the NSW tribunal.

Payments now average about $250,000. The NSW tribunal handled a reported 633 cases in 2001-02.

Source and Copyright: The Age.

The complete story can be found at: http://www.theage.com.au/articles/2004/01/11/1073769452839.html