“The proposed model will ultimately make it harder for targets of sexual harassment to vindicate their legal rights; it will deter women from pursuing cases and reduce the compensation that they will achieve if they do proceed,” the letter read.

As Women’s Legal Service NSW principal solicitor Pip Davis noted, the bill “misses an important opportunity to address the power imbalance experienced by working women bringing actions against their employers”.

The risk, Ms Davis pointed out, is that if a claimant loses, “they have to pay hundreds of thousands of dollars in legal costs”.

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More puzzle pieces

In conversation with Lawyers Weekly, Maurice Blackburn principal Mia Pantechis — who was one of the signatories to the letter — mused that the introduction of a positive duty to prevent sexual harassment is the “cornerstone of the bill”.

“The positive duty is intended to reduce the prevalence of sexual harassment. It plays an important role in stamping out sexual harassment in Australian workplaces. However, it is only one piece of the puzzle,” she said.

“Even with the positive duty, instances of sexual harassment will arise. In those situations, ensuring a viable jurisdiction remains available to claimants to enforce their rights through the courts is a critical component of any overall scheme aimed at preventing and addressing sexual harassment, recognising harm, and deterring behaviour.”

Removes rule that loser pays winner’s costs

Shine Lawyers head of employment law Samantha Mangwana — another letter signatory – added that the proposed reform seeks to remove the ordinary rule that the loser pays the winner’s costs.

“Although it suggests that the courts could make their own ruling on costs if circumstances justify it, that will be down to the discretion of the judge on the day, and cannot be determined without going through a full hearing,” she warned.

“This leads to the inevitable result that parties will need to run up the full costs of trial to an ultimate conclusion (to determine liability, remedy, and then costs) to have certainty on who is ordered to pay costs.”

Legislators must bear in mind, Ms Mangwana continued, that those costs may then exceed compensation.

This means, she said, “that if a successful victim-survivor wins her case, she faces recovering nothing and even being out of pocket”.

“It discourages early settlement, since the parties will not have sufficient certainty on costs to negotiate these realistically,” she said.

While the bill intended to encourage victim-survivors to pursue legal action, Ms Mangwana deduced, “it will have the reverse effect”.

Impacts on ‘no-win-no-fee’ arrangements

A spokesperson for Slater and Gordon noted that the firm applauds the Albanese government’s commitment to implementing the recommendations of the Respect@Work report but added that the firm does “think that on the proposal for litigants to bear their own legal costs, the commissioner has got it wrong”.

“Taking on a case is much more than the commerciality of a matter,” the spokesperson explained.

“More often than not, it’s about standing with people who have been let down by their employers and their workplaces, and this has been the case for countless Australian women.

“Where powerful men have abused their power, it isn’t an even playing field for their victims — history has demonstrated that.

“Anything that could limit women’s access to justice needs to have serious consideration.

“If corporations have done the wrong thing and harboured sexual predators and sexual harassers and/or covered up for them, they should be liable for costs.”

Lessons from the UK

Without certainty on costs, and needing to weigh that up against compensation, plaintiff lawyers will not be able to offer no-win-no-fee agreements even in cases they believe will win, Ms Mangwana hypothesised.

“This is what I saw repeatedly in my time in the UK, where no-win-no-fee agreements could only realistically be offered to very high-earners, who stood to recover high damages awards related to their loss of earnings, sufficient to cover their legal costs,” she reflected.

“To remove the deterrent of an adverse costs risk, and ensure that victim-survivors still recover meaningful compensation after their legal costs, a simple alternative would be to substitute the costs rule from federal whistleblower protections, since these too are cases brought in the public interests.

“Costs can then only be awarded against a plaintiff if the case was brought vexatiously or without reasonable cause, or conducted unreasonably.”