‘No worker should ever be priced out of justice’: Advocates celebrate passage of Costs Protection Bill

The Attorney-General, unions, and the legal assistance sector are celebrating the passage of the Costs Protection Bill, which will prevent courts from ordering applicants to pay a respondent’s costs in discrimination cases.

The bill

Late last week (Thursday, 19 September), the Senate passed the Australian Human Rights Commission Amendment (Costs Protection) Bill 2023.

The bill, first introduced in November of last year, intends to adhere to recommendations arising from the Respect@Work report, authored by former sex discrimination commissioner Kate Jenkins, which found that applicants are often deterred from proceeding to court with sexual harassment matters because of the risk of having to pay a respondent’s costs.

“By preventing a court from ordering an applicant to pay a respondent’s costs other than in certain limited circumstances, this bill would remove a significant barrier for those seeking justice through federal court proceedings for unlawful discrimination matters,” Attorney-General Mark Dreyfus (pictured) said at the time.

“… the bill also recognises that not every respondent in an unlawful discrimination proceeding will be well-resourced or have a significant power advantage over an applicant, such as some individuals or small businesses.”

The financial constraints faced by complainants have long been seen as an impediment to the filing of court proceedings.

In its submission to the Senate committee on the issue in February, the Australian Council of Trade Unions said: “Despite nearly 3 million Australians experiencing sexual harassment each year, only 11 cases are brought to court each year on average. This is a shockingly low figure.

“This is because the barriers to bringing claims are enormous, and many women make the very rational decision to not risk their financial future by pursuing a case in the courts,” the ACTU said.

The union movement’s research further suggests that only one in 230,000 victim-survivors of workplace sexual harassment bring proceedings to Australian courts.

Those findings are not dissimilar from the experience of Victoria Legal Aid’s specialist discrimination law service, the Equality Law Program, which – Victoria Legal Aid special adviser Melanie Schleiger advised – has provided over 12,500 legal advice sessions on discrimination matters and run over 1,000 case files in the last decade.

However, she noted, only four of the service’s clients ultimately proceeded to hearing and final judgment during those years.

‘Enforcing your rights shouldn’t bankrupt you’

Last Thursday, the bill passed the Senate.

This means, A-G Dreyfus said, that the federal government has now implemented all recommendations of the Respect@Work report.

With exceptions being provided for successful respondents who “do not have a significant power advantage or financial or other resources” to bear costs, and ensuring that applicants must pay costs where they have acted “vexatiously or unreasonably”, the bill “achieves a better balance” of the rights and interests of all parties, A-G Dreyfus proclaimed.

The new Sex Discrimination Commissioner, Dr Anna Cody, welcomed the fulfilling of the commitment to all 55 recommendations from the Respect@Work report.

"Seeing action being taken in response to all Respect@Work recommendations is a monumental achievement for Australia. It marks a transformative moment in our nation's journey towards creating safer, more inclusive, and respectful workplaces,” she said.

“Each recommendation was designed with the goal of addressing and preventing workplace sexual harassment. To see them all being actioned is a profound step forward in helping shape workplaces where respect is at the core, so every person feels safe, valued, and empowered."

ACTU president Michele O’Neil welcomed the bill’s passage, saying that “no worker should be priced out of justice”.

“This is a massive step forward in holding perpetrators accountable and making workplaces safer for everyone,” she said.

National Legal Aid executive director Katherine McKernan noted that Australia “still has unacceptably high rates of sexual harassment, and it is important that people who are disadvantaged can access justice if they experience discrimination”.

“This change is especially important for individuals in low-paid and precarious employment, which often translates to lower awards of compensation that are quickly eroded by legal costs in litigation,” she said.

Schleiger said: “Today’s change removes a significant barrier and addresses the power imbalance between victim-survivors and their employers – who often have legal teams and large budgets to defend claims.”

Kingsford Legal Centre director Emma Golledge supported this, saying: “Enforcing your rights shouldn’t bankrupt you, and people who experience sexual harassment shouldn’t be forced to end their claims because of this fear.”

‘The most significant reforms … in a generation’

Isabelle Reinecke, who is the founder of non-profit strategic litigation incubator and funder Grata Fund, proclaimed the new laws to be “the most significant reforms to access to justice in a generation”.

“Courts are a critical pillar of democratic participation as they enforce our Parliament’s laws. There is no point in having laws if people aren’t able to access and enforce them,” she said.

“Ensuring that courts aren’t just the realm of a wealthy few means that all communities have the opportunity to hold governments and corporations accountable and enforce and enjoy our rights.”

Grata Fund general counsel Maria Nawaz said: “Over the course of my career, I’ve seen too many women forced into silence over pursuing justice for sex discrimination because the cost risk is simply too high.

“I can’t overstate the significance of this reform; it will mean victim-survivors of sex, race, age, and disability discrimination will be able to enforce the laws that are supposed to protect them – everyone in Australia benefits.”

Elsewhere, Mitchell Skipsey, who is a senior solicitor at the Justice and Equity Centre (formerly the Public Interest Advocacy Centre), said the bill’s passage is a “game changer”.

“The old rules meant many people who experienced discrimination felt they couldn’t pursue a claim due to the risk of losing their home or facing bankruptcy if they weren’t successful. No matter how strong the claim, no court case has a 100 per cent chance of success – there is always risk. Now, more people will have the opportunity to seek justice after unlawful treatment,” he said.

Discrimination claims “can be a David and Goliath battle”, Skipsey mused.

“The equal access costs model rightfully recognises that the public interest is served when perpetrators are held to account for unlawful behaviour,” he said.

A potential tilting of the balance

Not all legal stakeholders will be enthused about the bill’s passage, however.

In its submission from January, the Law Council of Australia expressed concern that, while the legal system must not deter victim-survivors from holding persecutors to account, the proposed bill “tilts the balance overly in favour of the applicant and moves the financial risk and disincentive for unmeritorious claims to the respondents”.

“Notwithstanding the bill’s provisions regarding vexatious or unreasonable proceedings, this may result in large numbers of applicants bringing unmeritorious and protracted litigation without sufficient incentives to ensure efficiency within the justice system,” the LCA said.

“In this context, the Law Council is concerned that the Costs Protection Bill reduces incentives for the parties to engage genuinely with the AHRC’s conciliation processes and, later, in any alternative dispute processes available in the courts and settlement negotiations.”

LCA president Greg McIntyre acknowledged, in a statement from earlier this year, that there is often a power imbalance in favour of employer respondents in discrimination claims, and “while the goal is to prevent David versus Goliath battles, discrimination law is about much more than just unfair treatment of employees”, and pointed to the four federal anti-discrimination acts, under which respondents may be individuals, small businesses, or community organisations.

LCA instead recommended what it called a “broad-discretion” model, McIntyre said.

Under this model, he explained, “costs would still follow the event by default, but the courts would have to consider whether to depart from this position, taking into account a range of relevant factors to help ensure that the eventual costs order is as fair as possible”.

“Applicants would still bear some risk, but would have certainty that their personal circumstances would be taken into account,” he said.