Unascertained Future Claims: Current Issues and Future Reforms

Abstract

A long tail liability arises where the conduct of a company causes its employees and members of the general public to suffer personal injury that only manifests itself at some indefinite future time. A striking recent example of such liability is the James Hardie case. Although this issue may affect thousands of people, Australia’s corporations legislation does not really take it into consideration. Nor does it treat the unascertained future personal injury claims that may arise from long tail liability as debts owed by a company. The law, in fact, does not even recognise the existence of such a liability. This article considers the current position under Australian law and compares it with overseas legal systems such as that of the United States. The article also discusses the Corporations and Markets Advisory Committee’s recommendations in relation to the treatment of long tail liability claims.