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Michael Bradley

Rushing necessary law reform will create legal cost issues for sexual violence survivors

The Albanese government’s “Respect at Work” bill is, for the most part, good and necessary law reform, a genuine and considered attempt to begin the long work of rebalancing power in the labour market after decades of neo-liberalism have delivered us entrenched and ever-worsening inequality.

However, as the independents have been pointing out, it’s being rushed and the government’s unwillingness to negotiate is risking both some bad law being made and the whole thing failing in the Senate. 

This is just as much a problem of impression as of practicality; the new government hasn’t worked out yet that this may be the last term of Parliament when either major party holds a majority in the House of Representatives, and that they’d be wise to get used to negotiating with genuine intent.

However, one of the faults in the Respect at Work bill is seriously problematic for sexual violence survivors, so it’s attracted my attention as well as that of a long list of lawyers, academics and activists who have issued an open letter to Attorney-General Mark Dreyfus asking him to reconsider it. Independent MP Monique Ryan has already proposed an amendment to fix the problem.

The obscure amendment is tucked away in Schedule 5 of the bill, among changes to the Australian Human Rights Commission Act. Specifically, it will change the rules around the awarding of legal costs in litigated sexual harassment cases. These cases are run in the Federal Court or Federal Circuit and Family Court, after conciliation in the human rights commission has failed. The courts can award uncapped damages for harassment.

Currently, the court can and usually does award costs to the winning party, making the pursuit of sexual harassment claims a risky proposition for victims (on the David v Goliath principle). The bill will change this to a “costs-neutral” principle, meaning that the courts will be directed to not award costs at all unless there are exceptional circumstances justifying it. In effect, it will become a no-costs jurisdiction, as is most employment-related litigation (for example, in the Fair Work Commission).

The government has said that this will increase access to justice, by removing the risk to victims of copping an adverse costs order (which could be in the hundreds of thousands of dollars). In fact, it will have the opposite effect.

The problem is one of asymmetry. In almost all cases, the victim of harassment is an individual employee and the entity they are suing is a company. The imbalance in financial resources, and therefore the capacity to prosecute litigation, is immense.

In order to be able to take on the case at all, a victim has to either be able to fund it themselves — usually, impossible — or find a lawyer who is prepared to run it pro bono or on a no-win, no-fee basis.

There is a practical economic issue here, which is that much of the bulk of harassment claims is taken on by law firms whose business model is no win, no fee, and they won’t do so unless they have a prospect of being paid. Otherwise, their business model doesn’t work. If they are absent, then it becomes far more difficult for victims to find lawyers, as the profession’s capacity to do pro bono work is of course limited.

Employers have far greater ability to fund their defence costs, or they may have insurance cover for claims. The asymmetry is obvious, and its result will be that the new disincentive to pursuing claims that this bill will create will outweigh the benefit of removing the risk of adverse costs orders.

There’s a simple and elegant solution: leave the current position as it is with regard to awarding costs in favour of successful claimants, but provide that respondents cannot be awarded their costs if the claim fails, unless the claimant has conducted their case vexatiously or unreasonably. Completely unmeritorious claims will still be open to punishment with costs orders, but genuine victims will be able to bring their claims forward without undue financial risk, and secure good legal representation on a viable basis.

Sexual harassment is a scourge, and a significant part of the endemic problem of sexual violence in our society. Having recognised that its victims should be entitled to compensation from the employers who fail to protect them from it, we should be mindful of not shutting them out from justice by allowing the legal system to perpetuate the power imbalance that is key to the violation in the first place.

The problem can be easily fixed, and I hope the government is listening.

Correction: A previous version of this story incorrectly referred to the speed at which this legislation was travelling through Parliament. The story has been amended to more accurately reflect the current process in regards to this bill.

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