Legal protection standards for long-tail liability claimants are set to improve following the release of a report addressing concerns raised in the James Hardie inquiry.

Last week independent government adviser the Corporations and Markets Advisory Committee (CAMAC) recommended the extension of creditor protection measures to future personal injury claimants.

It follows concern the long-tail nature of some liability claims can see firms go to the wall before claimants can access compensation.

CAMAC Executive Director John Kluver says the James Hardie asbestos campaign identifies “a need for improved protection measures”.

The building materials company was accused of fleeing its asbestos responsibilities by relocating the parent company to the Netherlands in 2001.

In a report to the Federal Government, the committee proposes lawyers representing liability claimants should be allowed to challenge deeds of company arrangements should they be detrimental to claimants’ interests.

James Hardie used a deed of arrangement in relocating its company headquarters.

Among the report’s findings is a recommendation to compel companies to produce a plan to deal with anticipated long-tail liabilities.

It recommends firms be barred from engaging in transactions that may “materially prejudice” their ability to meet “liabilities to future injury claimants”.

The committee recommends a US-style measure allowing firms with anticipated liabilities to seek a court order confirming a plan to deal with future claims.

To deal with company liquidations, the committee proposes courts should have the power to order funds to be committed to trust for personal injury claimants.

Corporate Law Minister Nick Sherry says the Federal Government will closely consider the recommendations.