The Law Council of Australia has cautioned against proposed amendments aimed at removing cost barriers for applicants in sexual harassment and discrimination cases, warning of potential “arbitrary and unintended consequences.” The legal body expressed its reservations in a submission to a parliamentary inquiry, asserting that the proposed changes could inundate the courts with “unmeritorious” claims.
The bill under scrutiny, presented by the Labor party, seeks to eliminate cost orders, which require the unsuccessful party in court to pay both their own and the other party’s legal bills. The Law Council, sympathetic to arguments for asymmetrical costs, emphasized its concerns that the proposed amendments disproportionately favor accusers, placing the financial risk on those being accused.
The federal government’s proposed cost protection amendments, introduced in November, aim to shield applicants from costs even if their case is unsuccessful. Attorney General Mark Dreyfus asserted that the changes would eliminate a significant barrier for those seeking justice in federal court proceedings for unlawful discrimination matters.
While the Law Council acknowledged the vulnerability of applicants compared to accused respondents, it argued that the proposed bill excessively tilted the balance in favor of the applicant, potentially resulting in numerous unmeritorious and protracted litigations.
Grata Fund’s executive director and founder, Isabelle Reinecke, countered the Law Council’s stance, asserting that the legal body misunderstood the discrimination system. Reinecke argued that the proposed safeguards, such as approval by the Australian Human Rights Commission, would prevent frivolous claims from reaching the courts.
The Law Council’s submission emphasized that cost orders were just one aspect of a larger, complex picture. It suggested the need for stronger roles for non-court institutions, increased availability of legal aid, and judicial education.
The proposed changes stem from recommendations in the 2020 Respect at Work report, with the report suggesting a “hard cost neutrality” model, where each party bears its legal costs, except in cases of vexatious or unreasonable behavior. The Australian Human Rights Commission supported this model, expressing concerns about the unintended consequences of the bill and recommending a review within three years of the changes commencing.
Lawyer Kieran Pender, part of a research team contributing to a report on the history of damages and costs in sexual harassment litigation, welcomed the proposed changes, describing them as a “welcome step forward.” Pender argued that the asymmetrical model was necessary to address power imbalances and resource disparities faced by those experiencing sexual harassment.