Unions will launch legal action against a bid by James Hardie's asbestos compensation fund to start paying victims in instalments rather than lump sums.

The ACTU executive has voted for legal action blocking the body's Supreme Court application to pay out sufferers in instalments because of a projected multimillion-dollar funding shortfall.

In September, the Asbestos Injuries Compensation Fund, bankrolled by James Hardie Industries, announced it was heading for a cash shortfall of $184 million by 2017 after underestimating the number of people dying because of toxic asbestos.

ACTU secretary Dave Oliver said the average sufferer of the fatal asbestos-related cancer mesothelioma died 155 days after being diagnosed.

"Asbestos victims do not die by instalments and should not be paid in instalments," Mr Oliver said.