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.
Of course, Mike. Let’s face it: Chasing ambulances isn’t quite so lucrative when you might have to pay for your own gas. You want to ‘fix’ this lego, alright: in your favour!
The ‘costs/power asymmetry’ you cite only really becomes relevant if litigation is actually entered into, the HREOC (or other) recourse/resolution options having been exhausted. Most companies will err on the cautious settlement side if faced with even an arguable accusation. Those claims that do get to court are often highly problematic – that’s why conciliation breaks down, they are hotly disputed by respondents. Such claimants will often struggle to find NWNF/pro bono representation, anyway. (Lawyers like MB talk a big ‘universal access and compassion’ legal game, but in the end they have to pay their rent and staff too, and even for the pappiest of soft pap prog curtain-twitchers, it all comes down in the end to the cost-benefit-risk calculus.
What MB is advocating here is – in practical impact – a cost-risk-and-consequence-free ‘speculative grievance shopping’ framework. It’s litigative ‘moral hazard’. Great for companies like Marque, Shine and Waller Legal (The Pell saga ambulance-chaser). Not so great for cashed-up ‘sitting duck’ companies, people queueing for Family Court rulings, or us taxpayers, who (rightly) pay a lot to make HREOC (and a growing number of other) recourse options more than just box-ticking exercises for the vexatious en-route to legal brinksmanship and opportunism.
Also perhaps pretty fraught for many claimants too, actually, some of whom might be lured by its ‘cost free’ sheen into entering into protracted, personally destructive litigation that they were unlikely ever to win. ‘Not having to pay’ the $100’s of $1000’s in costs to the other side may be of zero comfort in those cases.
“ Most companies will err on the cautious settlement side if faced with even an arguable accusation.”
Will they, Jack? Can you point me in the direction of the evidence for this, please? And what’s a “cautious settlement”?
It’s a very fair challenge, Kathy. Let me answer two ways: firstly, no, not really, it’s an anecdotal assertion based on my own limited experience as an executive*, contemporary reporting of cases in the #MeToo era, and also first principles/CDF instinct. Second response is probably more apposite: fair enough cop, but can you (or MB) point me to the evidence that suggests the reverse? That is, evidence – ie not self-selecting, self-reporting survey data collated by organisations with a vested existential susceptibility to confirmation bias – that suggest the ‘power assymetry’ MB speaks of really is the massive hurdle he claims it is to ‘accessible justice’ for victim-survivors who have not found satisfaction at HRC (or other avenues, such as internal company avenues, FWC, etc). The primary reason for the existence of HRC – for the principle of ‘human rights’ in entirety – is to dissipate, to sidestep, to provide an alternative means of complaint that neutralises that individual v. institutional ‘power assymetry’. That’s why we as taxpayers pay $30 million a year for the Kate Jenkinses, Rosalind Crouchers, Chin Tans, Lorraine Finlays etc of the Commission. Filing a complaint with HRC is cost-free and you can do it as easily as clicking-filling a few boxes – pretty much every kind of harassment you can think of is catered for. And – here’s a hint, eh, MB – you don’t need to hire an
ambulance-chasinglawyer to get the level-playing-field complaint-investigation/conciliation process underway.All of this is good. But the whole point of it is to avoid the power-assymetries MB cites.
Of course, not every complainant gets a non-litigation conciliation, a settlement, an outcome that satisfies. But here’s where we get to the problematic assertion MB makes – at minimum, one no less problematic than mine about company pragmatic caution. How do we know that those complainants who walk away from the HRC (or other) processes and seek court satisfaction instead…do so because their complaint is legitimate, it’s just the ‘system’ that isn’t…presumably, in other words, the HRC system is ‘assymetrically loaded’ against them, too? If that’s the case, I want my $30 million a year back, thank you, Commissioners!
The reality is that far more often, those who end up in litigation do so because they want a certain outcome, and their case isn’t strong enough at HRC to leverage an outcome there. So those who can, throw money at lawyers instead, or if they’re compelling/lucky, they get someone like MB to take them on board, maybe as part of a ‘reform’ crusade, maybe some cynical pollies will jump on board, of course the clickbait needy meeja, too…gosh, maybe a clever lawyer can even tap your case into a ground swell ‘hashtag’ movement?! It all becomes part of the ‘negotiating arsenal’, right – because, obviously, if you do go to court alleging sexual harassment against a cashed-up, high profile company (or a government)…well, that process in itself also involves its own organic ‘concilation’/settlement negotiations, right? And these pivot on all manner of lawyerly brinksmanships, manouvring, ambit-claiming, cost-benefit pragmatism, and so on. Maybe MB really just wants what all litigation lawyers want: a seat at the $$ negotation table. As he himself implies, if inadvertently…a successful HRC conciliation kind of…hits his business model, too! The prospect of a ‘cost-risk-free’ crack at a court settlement…well, that’s hardly going to encourage a complainant to get an outcome at HRC. AIUI, that lot generally can only negotiate lost wages, etc.
Win or lose, reliving sexual abuse and harassment even in litigation court is almost always a personal disaster for real – non-vexatious – victim-survivors. Opening the door to ‘litigation moral hazard’ in this way would IMO be yet another #MeToo-fuelled, short-sighted disaster for victim-survivors generally, IMO, and the wider issue of strategic, measured sexual crime law reform.
Cheers Kathy. Soz for length.
* the three cases/allegations of which I knew a ‘little’ firsthand detail were all settled; one very rightly so, two very much against the wishes of the individual respondents, but on internal company legal advice (examples of a ‘cautious settlement’). Anecdotally in my experience this doesn’t seem too atypical – but I might have a skewed impression. (All three by the way involved NDAs, a complicating factor but also a bit problematic, too: what most women I know who’ve been genuinely harassed really want is actually public recognition of it/public consequences for the harasser/respondent – not money.)
You don’t understand. The claimant who wants to take such a case to court has to either be able to pay their own lawyers (pretty much unthinkable for this sort of litigation), or else find lawyers who will act on a no-win-no-fee basis. You seem to have confused them with lawyers acting pro bono who cover all their own costs out of their own pockets no matter what. These no-win-no-fee lawyers are not being charitable. They are in it for the money. So they never take a case unless they are convinced it is likely to win, given that all the cases they lose are a dead loss to them. That weeds out all the cases you are so bothered about before getting anywhere a court.
No, I haven’t ‘mixed up’ NWNF and pro bono, SSR – but thanks for the condescension anyway. By the way, both NWNF and pro bono arrangements can come in infinite variety and degree of provisionality, applicability and services extended, including regarding costs award issues and liability. Oh, also by the way, a losing ‘pure’ NWNF lawyer does turn out to have been acting ‘pure’ pro bono.
The issue with this proposal is the ruinous unintended consequences. The HRC process (and other non-court btw) is deliberately there – at significant taxpayer cost – to sidestep MB’s power imbalance concerns. To provide recourse and resolutions that don’t demand attrition warfare by lawyer fee. That’s the whole point. Now if a ‘reform’ lawyer like MB thinks the non-litigation system is still weighted against the complainant, fair enough. But argue to even/beef it up, not weaken it, by default…which is actually what this ‘litigation moral hazard’ will do.
It’s a very good thing that there are cost barriers to a (non-criminal) court free-for-all dealing with matters of sexual harassment and abuse, because it acts as an incentive to avoid it if you possibly can. If a complainant has a genuinely strong case and HRC hasn’t given them satisfaction (because it has limits to what it can award), fine, they will likely find a NWNF and/or a pro bono. Yes, these ambulance chasers are in it for the money..but that means they do have to risks if they want to make any at all. (More typically they will NWNF-negotiate settlements…ie avoid actual court).
But if you strip the costs-risk from the complainant side only, all you will do is a) weaken the non-litigation processes and b) encourage these ambulance-chasing parasites to urge into the court process many more complainants, who’ll end up either not being able to negotiate anything much, and seeing their NWNF suddenly melt away…or continue into court with their weak cases, and being personally savaged in and by the (losing) process.
It’s litigation moral hazard. Encouraging people to go to legal war with well-resourced companies as a ‘speculative’ gambit is a cavalier betrayal. Insane. But go ahead and try it, if we like. See what happens. (Like I said, be fantastic for MB’s et al business model!)
Make sense. I hope your proposal is adopted.