The Australian Securities and Investments Commission (ASIC) has some big fish on its hook, but the real battle could be just beginning.

Pursuing business leaders like James Hardie Chairman Meredith Hellicar – who is understood to have resigned her post early this morning, along with two non-executive directors – and former CEO Peter MacDonald will probably cost several years and plenty of legal bills.

Last Thursday ASIC began civil proceedings against James Hardie Industries and 10 current and former directors of the company. Allegations relate to inadequate funding of James Hardie’s compensation fund for victims of its asbestos products.

Specifically, ASIC alleges the company made misleading statements about the Medical Research and Compensation Foundation, failed to disclose an indemnity deal between the two entities and also kept pertinent information on future liabilities hidden during its controversial restructuring and effective relocation to the Netherlands.

All directors at that time – executive and non-executive – are facing court action.

ASIC Chairman Jeff Lucy says the special commission of inquiry into the fund may yet lead to criminal charges against some or all of the directors. The fact that James Hardie set up the fund does not lessen the gravity of the alleged breaches.

ASIC is seeking civil penalties, such as corporate bans and punitive damages of up to $200,000. But final decisions in the cases could take some time.

Director of Melbourne University’s Centre for Corporate Law Ian Ramsay says the matters are complex and involve 10 individuals and two corporate defendants. “It could potentially go on for several years.”

Along the way, legal eagles will be watching for important precedents. Professor Ramsay told Sunrise Exchange News the cases could create new case law – particularly in the way courts deal with non-executive directors. Board members could argue they were misled and therefore blind to the alleged breaches.

“They believe they have fully complied with their duties,” he said.