James Hardie's restructuring and movement of corporate bedquarters
to The' Netherlands, and the potential impact this bas On victims of
asbestos-related diseases caused by James Hardies once subjsideary '
Companies, One of the implications of tbe curjJorate restructuring was
tbat the new lwldlng comjJany in the james Hardie cm1Jorate group
was shielded /i-om any litige/tioll taken out against the subsidim)!
companies by asbestos vidims due to the establisbment of a fund, the
Medical Research and Compensation Foundation. This was comjJletefy
separated ft'om the james Hardie Gmuj}. In the rejmrt, the
CUlnmissioner did not engage in much consideration as -to how
corporate law in Australia could be reformed to make a holding
company liable fo,' tbe debts ofits subsidlmJ.' comjJanies resulting/mm
death Or jJersonal ;'~itIJJ'~ yet jJotentiallaw reform has certainly dm'wn
tbe attention of a numbe,- (1' commentaton botb befm'e and after the
report was handed down.
WJ.1L/t tbe majority of commentators, including Counsel Assisting tbe
lames Hardie InlJuhJI, balle suggested is that limited liability (a
cornerstone pt'inc/ple of co,po-mte law) sbouid be restricted so that a
holding comjxmy (often the only sharebotde" of a subsidimy
COmjJany) will be betd liable fi)/" subsidimJ.' comj)(IIlY liabilities
resulting from personal injUl')l Or deutb, According to the authm; tbe
broad mU fOI' ,'eform to 'restrict the limited liability pl'ineiple' in
response to tbe ,'eport into james Hm-die's restructuring is misgUided
and tmubling. Limited liability is an imjJortctnt pril'ilege bestOll'ed On
sbarebolders, botb large and small, and sbould only be restricted wb/m
there is an ol'e-rriding justification fb'- doing so. Wbile an oVl'ious efI'xt
ofsubjecting boldlng comjJanies to liability for debts of its subsidim-Ies
is to restrict tbe application Of limited liC/Mlity to bolding comjJanies
(as tbe largest sbcl1'ebolde1- /n tbe subsidimy), lau' refon1/. can...