The relatives of people who died due to an asbestos-related respiratory disease have welcomed the first ever Action Day, which has been set up to help
THERE was a big surge in compensation claims against James Hardie for the fatal cancer mesothelioma last year, but an industry expert hired by the company says it may be the last big leap.
In a report released earlier this month, actuary Richard Wilkinson said publicity about James Hardie's underfunding of an asbestos compensation trust it set up in 2001 caused a spike in claims.
This was partly because the 2004 special commission of inquiry into the shortfall increased public awareness about rights to sue for compensation, and partly because lawyers and other advisers feared that the cash-strapped trust would apply for voluntary liquidation.
Mr Wilkinson's work will be sent to James Hardie shareholders before they vote on the board's proposal, settled with the NSW Government on December 1, for the company to fund all future proven claims.
The trust received 254 mesothelioma claims in the year to March 2005, a 40 per cent increase on the previous 12 months and double the 126 claims received in 2000-01. But Mr Wilkinson, from KPMG Actuaries, said there had been a "marked reduction" in the early months of this financial year.
Anecdotal evidence from other former asbestos producers, insurance companies and law firms suggested a similar experience, he said.
Mr Wilkinson has told James Hardie to expect the number to drop to 218 this year before returning to around 240-250 for another four or five years and then beginning a permanent, steady decline.
Although James Hardie stopped making asbestos products in 1987, the average 35-year latency of mesothelioma means compensation funds will be needed until mid-century. In a report earlier this year, Mr Wilkinson predicted that 5268 Australians would contract mesothelioma from exposure to James Hardie products in coming decades. His latest report reduces that number to 4915.
When less serious forms of asbestos-related disease are included, he expects James Hardie to compensate 8725 victims, down from his previous estimate of 9085.
In 2005 dollars, he expects this to cost the company $1.6 billion.
While the special commission of inquiry cast a poor light on previous actuarial studies carried out for James Hardie, which concluded that $300 million would fund all future claims, the riding instructions given to Mr Wilkinson are more conventional than the commissions issued by James Hardie's disgraced former managers, and his work is considered more thorough.
However, he has warned shareholders that his report does not cover all eventualities.
For example, he has made no allowance for a surge in so-called "third wave" claims predicted by some experts. This is the industry's terminology for people who fall ill from exposure to asbestos installed in homes and public buildings such as schools and hospitals.
Medical experts regard asbestos sheeting as safe if left untouched after installation, but dangerous if the fibres are disturbed in renovation or removal.
The first wave of illness affected asbestos miners, the second wave workers in the factories which made the sheeting or in industries which used the fibre for large-scale insulation such as power plants or shipping.
Mr Wilkinson said his calculations assumed that third-wave claims would continue at their current modest level.
In a report released earlier this month, actuary Richard Wilkinson said publicity about James Hardie's underfunding of an asbestos compensation trust it set up in 2001 caused a spike in claims.
This was partly because the 2004 special commission of inquiry into the shortfall increased public awareness about rights to sue for compensation, and partly because lawyers and other advisers feared that the cash-strapped trust would apply for voluntary liquidation.
Mr Wilkinson's work will be sent to James Hardie shareholders before they vote on the board's proposal, settled with the NSW Government on December 1, for the company to fund all future proven claims.
The trust received 254 mesothelioma claims in the year to March 2005, a 40 per cent increase on the previous 12 months and double the 126 claims received in 2000-01. But Mr Wilkinson, from KPMG Actuaries, said there had been a "marked reduction" in the early months of this financial year.
Anecdotal evidence from other former asbestos producers, insurance companies and law firms suggested a similar experience, he said.
Mr Wilkinson has told James Hardie to expect the number to drop to 218 this year before returning to around 240-250 for another four or five years and then beginning a permanent, steady decline.
Although James Hardie stopped making asbestos products in 1987, the average 35-year latency of mesothelioma means compensation funds will be needed until mid-century. In a report earlier this year, Mr Wilkinson predicted that 5268 Australians would contract mesothelioma from exposure to James Hardie products in coming decades. His latest report reduces that number to 4915.
When less serious forms of asbestos-related disease are included, he expects James Hardie to compensate 8725 victims, down from his previous estimate of 9085.
In 2005 dollars, he expects this to cost the company $1.6 billion.
While the special commission of inquiry cast a poor light on previous actuarial studies carried out for James Hardie, which concluded that $300 million would fund all future claims, the riding instructions given to Mr Wilkinson are more conventional than the commissions issued by James Hardie's disgraced former managers, and his work is considered more thorough.
However, he has warned shareholders that his report does not cover all eventualities.
For example, he has made no allowance for a surge in so-called "third wave" claims predicted by some experts. This is the industry's terminology for people who fall ill from exposure to asbestos installed in homes and public buildings such as schools and hospitals.
Medical experts regard asbestos sheeting as safe if left untouched after installation, but dangerous if the fibres are disturbed in renovation or removal.
The first wave of illness affected asbestos miners, the second wave workers in the factories which made the sheeting or in industries which used the fibre for large-scale insulation such as power plants or shipping.
Mr Wilkinson said his calculations assumed that third-wave claims would continue at their current modest level.
posted by Chris Placitella | 9:36 AM
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