On May 3rd, after a long and tiresome 11 years, the High Court ruled against the seven James Hardie directors accused of breaching both the law and their duties as directors.
This ruling was made on the basis that they knowingly approved a press release that contained inaccurate and misleading information about their promise to asbestos victims.
The press release, which was sent to the Australian Stock Exchange (ASX), expressed the company’s intentions to relocate to the Netherlands, along with the fact that it had established a foundation to compensate James Hardie asbestos victims.
This foundation was claimed to contain enough money to ensure that all asbestos victims were fully compensated.
Within a few years of the original circulation of the press release in 2001, this was found to be untrue, as an investigation into the asbestos victim foundation, known as the Jackson inquiry uncovered that it was approximately $1.5 billion short and was expected to run out of money in the very near future.
Soon after, the Australian Securities and Investments Commission (ASIC) began to research the case. In 2009 the case appeared before the New South Wales Supreme Court, and the directors were found to have misled the ASX, asbestos victims and the Australian public in general.
Throughout this time James Hardie directors vehemently denied that they ever approved the press release and the board meeting minutes that stated otherwise were incorrect.
They believed they were innocent and subsequently appealed the decision, arguing that the draft version of the media release had never been approved by them.
Shockingly, in 2010 the New South Wales Court of Appeal overturned the earlier decision made by the New South Wales Supreme Court on the basis that not all directors had approved the media release, because ASIC did not call on an important witness.
As Australia’s most influential institution when it comes to the law, this High Court ruling cannot be overturned. Asbestos victims can finally rejoice.
Where to next..? Now that a decision has been made, ASIC has submitted a proposal to the New South Wales Court of Appeal, where they would like to see Peter Shafron, the company’s former general counsel, receive harsher penalties for his involvement in the asbestos case.