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James Hardie trust 'to sue company'

September 30, 2004 - 5:59AM

The trust James Hardie Industries set up for asbestos disease victims plans to sue the company under US anti-racketeering laws enacted to fight the mafia, it was reported.

The Australian described the laws as a legal "neutron bomb" that could triple damages payouts.

The move follows the release last week of a report which found the company knowingly underfunded the trust, the Medical Research and Compensation Foundation, by up to $2 billion.

The trust has contacted US lawyers to develop a case alleging that Hardie engaged in a pattern of fraudulent behaviour to deny compensation to future sufferers of its asbestos products.

Lawyer Nancy Milne told the paper the suit could be filed under the US Racketeer Influenced and Corrupt Organisation Act, passed by the US Congress in 1970 to destroy the mafia.

Prosecutors have successfully used it against organised crime figures, including Gambino family don John Gotti.

In recent years the so-called RICO act has been taken up by plaintiff lawyers, as it provides for a trebling of damages if a civil damages suit is won and racketeering proved.

Hardie derives about 75 per cent of its revenue from the US and is subject to US law because it is listed on the New York Stock Exchange.

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