Comcare - Australian Government
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Note 11: Contingent liabilities and assets

Workers’ compensation claims
Contingent liabilities
Balance from previous period 54,700 45,600
New - -
Re-measurement (4,300) 9,100
Liabilities recognised - -
Obligations expired - -
Total contingent liabilities 50,400 54,700

Quantifiable contingencies

The schedule of contingencies reports a contingent liability in respect of future statutory workers’ compensation claims for asbestos related diseases in the amount of $50.4m (2010: $54.7m).  The valuation of this liability was undertaken as at 30 June 2011 by an independent firm of consulting actuaries, Taylor Fry Pty Ltd.  This contingency relates to a decision in the Federal Court, Comcare v Etheridge and Ors [2006] FCAFC 27 where it was held that the inhalation of an asbestos fibre by an employee was not an ‘injury simpliciter’ or frank injury.  Accordingly the date of injury must be determined in accordance with s7(4) of the SRC Act which fixes the date of injury according to the earliest of the dates on which the employee dies, becomes incapacitated, impaired or seeks medical treatment as a result of the disease. Reported statutory asbestos claims are included as liabilities.

Unquantifiable contingencies

Comcare has a number of civil proceedings before the Federal Court relating to alleged breaches of the Occupational Health and Safety Act 1991. It is not possible to estimate the eventual legal costs of finalising these matters or the potential pecuniary penalty payable to the Commonwealth by the respondent if the matter is successful.

Prior to the Federal Court decision outlined above, long latency diseases where exposure to the disease-causing agent occurred pre-1 July 1989 but the diseases manifested themselves post-1 July 1989 were among the injuries considered to qualify under section 90B of the SRC Act for funding through the CRF. Resulting from the Court decision, payments made for these pre-premium liability disease claims, are potentially repayable to the Commonwealth.  However, it would be difficult to identify all of the cases in which relevant payments have been made by Comcare and therefore reliably estimate the potential liability to the Commonwealth. To remedy the situation, Comcare has submitted an amendment bill to introduce amendments in the SRC Act to extinguish the potential payable to Commonwealth. The bill is currently before Parliament.