Peter Gordon: Fighting for asbestos victims' rights

September 2005

Peter Gordon is a Senior Partner with the well-known labour law firm Slater & Gordon, who has for over 20 years sought justice and compensation for thousands of workers exposed to the deadly fibre, asbestos. He spoke with SafetyNet about 2 asbestos-related matters that are currently engaging his attention.

Peter Gordon - a crusader for Australia's asbestos victims
Peter Gordon - a crusader for Australia's asbestos victims

The first of these is the recently announced establishment of the Asbestos Research Trust.

Slater & Gordon has set up the trust which has two primary functions. One is to fund medical research aimed to find a cure for mesothelioma. It will award money every year and we're looking for applications from traditional sources and non-traditional sources too. The aim is to fund and assist the very many doctors around Australia at the moment who are working on some form of cure. There's genetic research and there's also drug therapy research that's going on and we think it's a good time to be involved in stimulating and sponsoring all of that research.

So is it a judgement that the company has made that the research you mentioned has reached a stage that there may be some hope that a breakthrough is close?

I have been doing this work for 20 years, and one of the most depressing parts about it is, both for doctors and lawyers, the complete absence of any hope you can give anyone. It is a disease with a terrible prognosis and I wouldn't want these remarks to be interpreted that there's been a huge breakthrough, but there is certainly a lot more research going on and I think there is some cause for some cautious optimism.

You said the Fund had two purposes?

Yes, the second purpose is to fund and promote better education in those who provide palliative care to asbestos disease sufferers, specifically mesothelioma sufferers. Apart from having a very bleak prognosis, it's a terrible, very painful and debilitating disease to have. Accordingly we feel that it's particularly important that people have the best palliative care and steps are taken to minimise their pain and maximise their quality and enjoyment of life where possible. And likewise, with research towards a cure, I think there have been many breakthroughs with regard to palliative care in recent years and I think that the run that people get when they suffer a mesothelioma these days is a lot better than it used to be. That's not to detract from it all, of course, it is a painful and debilitating illness, but I think it's just as important that we recognise, promote and sponsor those who are actively involved in the field of treating people.

How has Slater & Gordon established the fund?

We have committed $500,000 over the next five years; we've put in a substantial amount of that already and guarantee at least that amount over the period. Hopefully, if circumstances permit, we can do better than that.

Is the company looking to other sources of funding for the Trust?

We certainly want to make it available to others, particularly our clients, many of whom have expressed the desire when they have achieved a settlement to be able to put some money into something like this. So we certainly want to make this available to them and to others as well. Whatever differences may exist between various people who attend this tragedy, be they companies, doctors, lawyers, the one thing that everyone can unite behind is that a cure would be a great thing.

It's not beyond the pale, then to consider that a company that may have been the cause of people contracting an asbestos related disease contribute to the trust?

In fairness to both the major players, James Hardie and CSR have sponsored medical research in the past. While we could question whether it's been enough, given the responsibility both those organizations have, let's at least recognise that they have done that. More needs to be done and we want to play our part.

The second and somewhat related issue is the NSW Government Special Commission of Inquiry into the Medical Research and Compensation Foundation established by the James Hardie Group.

Slater & Gordon is one of the two major law firms representing unions and possible future claimants of compensation.

Yes, Turner Freeman is a law firm based in NSW and more recently in Queensland and South Australia. Along with S&G, we do the lion's share of asbestos litigation for disease sufferers in Australia, and have done so for the past 20 years. I can remember when I was running my first cases in the mid 1980's, the only other guy I could talk to was Armando Gardman, who is now the senior partner at Turner Freeman. So, it's a historic collaboration really, and it's a good thing because it draws together the expertise of the two firms.

Together we represent the ACTU, the various Trades and Labour Councils around the country, including the Victorian Trades Hall Council, a number of unions and all of the major asbestos disease support groups. It's an important collaboration for those groups as well, because James Hardie was of course the major player in asbestos manufacture and distribution in Australia in the twentieth century. They had at least 70 per cent of the market throughout most of the century, and occasionally they had upwards of 90 per cent of the market, so the damage caused by asbestos manufactured or distributed by James Hardie is in my opinion the principal cause of the mesothelioma epidemic Australia has had, unfortunately for some time now.

A brief background on the Inquiry - the question is that before JH shifted its operations overseas to the Netherlands, they established a fund to cover future claims by asbestos sufferers. The company put $300 million into this fund, and this now appears to be insufficient.

The major operating company of James Hardie was always James Hardie and Co Pty Ltd - they've changed the name of that company to Amica. Over the 10 years leading up to what is now the parent company of James Hardie and Co Pty Ltd, moving to the Netherlands, certain assets left the principal operating company and went to the parent company and I believe this was all preparatory to an arrangement whereby the (what was) the principal operating company would be left in Australia 'holding the baby' as it were. It would be left with $300 million of funds, which would be about probably 20 per cent of the value of the Hardies Group.

The other 80 per cent has found its way out of Amica, out of James Hardie & Co Pty Ltd, the principal operating company, to the parent company. The parent company has now jumped on a plane, its executives live in the United States, and the headquarters of the company is in the Netherlands.

The companies, the Hardies Group, of course says that this was pursuant to some whiz bang ideas they had about 'a better tax position' and 'better orientation with their principal markets'. I think the abiding concern that many people have is that this is an arrangement whose overriding purpose was to 'ring fence' the principal assets of the company from the asbestos liabilities which the company clearly bears and will bear in the future.

And is the situation now that it seems that the amount needed will in fact be much more than this - that it's been estimated by, what is it? Up to $700 million?

It's very hard to say how much it's been underestimated by. I think that on the basis of the research we've been able to do to date, and we haven't had access to anything like the actuarial information that Hardies or their various paid consultants have had, but I think I can safely say that whilst we agree that it's clear, and probably was always clear that $300 million was not enough, the question of exactly how large the shortfall is, is a matter of continuing investigation.

So the figures that have been bandied about then, are what, just guesses?

I would prefer to say no more at this point, other than it is clear that $300 million was not enough, based on what they knew, but I think the question of exactly how much it falls short is something that we do need to study and investigate and I think we will be in a clearer position to elucidate that as the Commission takes place and as we get exposure to the sort of information that Hardies and their advisors had.

So is this the scope of the Inquiry then to find out whether there has been an underestimation and what that might be? And will the Inquiry also consider whether the underestimation was intentional or not?

It's a matter for the Commissioner as to whether he does that, he may choose to do so. In my opinion it would be a relevant area of inquiry for him. Or he may simply choose to look at the question of 'was it enough?' If it's not enough, what are the other mechanisms available to get it back, and if it can't be got back, what's to be done? Should there be reform of corporations law to ensure that a company can't do this again? If there is a moral or legal culpability of James Hardie, what's the most effective way to bring it into effect?

As you said, then, it's up to the Commissioner, and at this stage he hasn't made clear how far he will go and he may decide to go further.

Yes, he may. He has quite broad terms of reference. It's clear from the terms of reference that the government intends that the Commission get to the bottom of what Hardies did, what the shortfall is, why it occurred and what's to be done about it. And a very large number of people representing different organisations are working very hard to achieve that end now.

In fact, one of the problems facing you and Turner Freeman is the short time frame. I understand that the Commissioner plans to have an interim report to the NSW government by June 30.

He has been asked by the government to report by June 30 and he is certainly making a very serious effort to comply with that, and that means that public hearings will begin next Monday, on April 5. Very large volumes of documents have been made available to the parties and more are being made available today, so there is a lot of work to be done.

Peter Gordon addressed the March 26, 2005 Victorian Trades Hall Council Executive meeting. The Executive resolved to:

  1. condemn James Hardie for its actions;
  2. call on the State Government, which has a direct interest in the matter, to fund and support the union and advocacy groups' case against James Hardie at the Commission;
  3. call for specific federal legislation to deal with James Hardie and ensure that other companies cannot take similar action;
  4. encourage affiliates to publicise the cause;
  5. lobby the State Government against further diminution of workers' common law rights.

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