The Guardian July 23, 2003

Asbestos victims dumped

by Peter Mac

Angry unions and asbestos support groups have denounced a new system that 
the NSW Carr Labor Government proposes to introduce for dealing with 
asbestos-related damages claims. The system would drastically restrict the 
number of claims for damages by people suffering from asbestos-related 
diseases, and would also savagely cut the amount of damages claimants could 
expect to receive.

The system would also significantly prolong the time taken to hear common 
law damages cases. In these circumstances most claimants would die before 
judgement could be made. Dependants would then be left with no compensation 
and the company involved would walk away scot free.

The new rules would also impose a cap on claims, similar to that operating 
in NSW for workers' compensation cases.

The system is said to have been drawn up by ALLIANZ, one of the major 
insurance companies acting for defendants in asbestos damages claims.

At the moment any Australian citizen suffering from an asbestos-related 
disease can lodge a claim with the NSW Dust Diseases Board for a weekly 
pension and hospital and medical expenses. They can also lodge a claim with 
the State's Dust Diseases Tribunal for common law damages against companies 
that have handled asbestos materials.

This is the fastest method of dealing with asbestos-related claims in any 
State of Australia. Speed is of crucial importance to most victims, because 
their life expectancy after diagnosis is very short, and damages claims 
fail that have not been heard by the time of death.

The Government proposes to limit, if not eliminate, the right of people 
living interstate to make claims in the NSW courts, and to cut litigants' 
legal fees.

ALLIANZ, formerly MMI, was the major insurer for firms producing asbestos 
material until 1987. It now self-righteously claims that the new proposal 
would limit "unnecessarily high legal fees which eat up workers' 
settlements" on cases involving "people that have never set foot in NSW . 
all at the expense of NSW taxpayers."

However, this statement is totally inaccurate.

Firstly, the new proposal would certainly reduce legal costs, but at the 
expense of claimants and their families. Under the Government's proposal 
common law damages would in effect be eliminated in favour of a toothless, 
financially capped "no-fault" scheme.

The Dust Diseases Board would make an assessment in lieu of damages, and 
the Tribunal would be left only as an avenue of appeal. Medical panels 
would determine payouts from a fund established by insurers and other 
companies with liabilities associated with asbestos.

The proposal would therefore definitely limit legal fees, but would also 
reduce the number of claimants (some would die before hearings were 
concluded, and others would be discouraged from making a claim). It would 
also weaken the process for determining costs and would severely limit the 
amount claimable.

As for the number of interstate cases, these constitute about 28 percent of 
the total, and most are from people who formerly lived in NSW. The "extra" 
cost to the NSW taxpayer is therefore negligible and could be eliminated by 
other States establishing a system with equal or greater efficiency to that 
currently in use in NSW.

The new system would also offer bonuses to certain defendants against 
common law claims. The companies James Hardies and CSR are the major 
defendants against asbestos-related claims, and both have allocated major 
funds for product-related damages cases. Under the proposed new system, on 
the other hand, compensation would be funded by all potential defendants, 
leaving Hardies and CSR with a windfall profit reserve.

But why is the government making the new proposal at this point in time? 
Firstly, the rate of claims is likely to rise dramatically over the next 
few years.

Asbestos has been officially recognised in Australia as a health hazard for 
40 years. (Indeed, the first scientific paper linking asbestos and lung 
disease was published in 1909.)

Diseases generated by asbestos take many years to appear. (Actor Steve 
McQueen developed asbestosis some 35 years after working for two weeks in a 
factory that handled asbestos.) The incidence of asbestos-related diseases 
is only now beginning to reach its peak, some 30 years after the widespread 
use of asbestos reached its zenith.

The incidence of such disease in workers formerly employed in asbestos-
related industries will therefore increase dramatically, as will claims 
against asbestos-related companies, over the next 15 years.

On the other hand, most of these workers are elderly, which means that once 
the disease develops their life expectancy is greatly reduced. Half the 
victims of asbestos-related illness now die within eight months of 

Therefore, any system that prolongs the average time taken to hear asbestos 
damages claims will directly benefit the defendant companies, by increasing 
the chances that claimants will die before their claims can be heard.

The NSW Division of the Australian Manufacturing Workers' Union (AMWU) has 
written to the NSW Labor Council, expressing its deep concern about the 
proposal, and asking that the Council adopt a resolution opposing any 
change to the current system of dealing with claims for compensation for 
asbestos-related illness.

The AMWU notes: "We are extremely concerned at advice that the State 
Government may be drafting legislation that would give effect to the 
ALLIANZ proposal. We are also extremely concerned about current 
investigations being carried out through the offices of the Attorney-
General, collecting and collating data on current dust diseases claims 
before the Dust Diseases Tribunal. We also believe that ALLIANZ have 
approached a number of officials in unions that represent workers with 
significant exposure to asbestos and related products."

Many unions have also expressed their disgust at insurance companies that 
have received huge premiums from companies such as Hardies for decades, 
knowing the high risks involved, and are now attempting to shift the payout 
to the public purse.

The AMWU stated that the new proposal would adversely affect victims of 
other dust-related illnesses. They noted: "Dust diseases affect workers in 
all industries, represented by all unions. The manufacturers of these 
products deliberately and knowingly made profits from products that lead to 
agonising deaths or a living hell for their victims."

Barry Robson, an official of the Maritime Union of Australia said last week 
that he had recently attended the funerals of three friends who had died 
from asbestosis and mesothelioma, but that he had also been pestered by a 
representative of ALLIANZ to support the Government's proposal.

However, he was having nothing of the proposal, and he predicted major 
industrial upheaval if the Government goes ahead with plans to implement 
the new system. "If they think Patrick's [1998 waterfront dispute] was a 
bit of a go they haven't seen anything yet of the waterside workers, I can 
tell you", he declared.

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