More responsibility for in-house counsel?

25 May 2009

ASIC recently alleged that claims made by two James Hardie companies about the ability of a foundation set up to pay asbestos claims, were misleading and deceptive or false and misleading. It also alleged that various directors and executives had breached sections of the Corporations Act 2001 in preparing and approving those statements.

In these proceedings, the Court found that, where a company is implementing a major transaction or corporate action and the company is making public statements concerning the matter, directors are not entitled to abdicate responsibility for approving and releasing public statements by delegating responsibility to other directors, management or advisers who may have greater expertise in the substance of the matter or in communications, or to the communications department.

The relevant case is Australian Securities and Investments Commission v Macdonald (No 11) [2009] NSWSC 287.

Click here to download a more detailed article about the James Hardie case.