Instability of coal pillars within disused underground mines is an important cause of mine subsidence affecting surface developments. Uncertainty and variability of materials, dimensions and loads affects our ability to assess the stability of these coal pillars. Traditionally, these parameters have been quantified using a deterministic approach. Variables affecting coal pillar stability were probabilistically analysed to determine the factor of safety and probability of failure. Two case studies in the Newcastle region were undertaken in order to simulate real situations. There are two types of uncertainty that need to be modelled: aleatory and epistemic. Aleatory uncertainty is 'random' uncertainty or natural variability. Epistemic uncertainty is uncertainty due to the lack of information. The probabilistic risk assessment method used in the case studies provided an assessment of aleatory and epistemic uncertainties. In the assessment of the stability of pillars in old abandoned workings, both types of uncertainty are encountered. Hence, the UNSW Pillar Design Method under-estimates the probability of failure as it ignores epistemic uncertainties of old pillars in abandoned mines. It was also found that there is no direct relationship between factor of safety and probability of failure. It was revealed that the level of uncertainty can have a significant impact on the probability of failure of a section of workings. The results of this study may lead to a requirement that developers use probabilistic methods to verify that proposed developments are subject to an acceptably low risk of subsidence damage.