Costs burden removed for (most) applicants in workplace sexual harassment and other discrimination claims

On 19 September 2024, Federal Parliament amended the Australian Human Rights Commission Act 1986 (Cth) to insert a modified ‘equal access’ cost protection provision for federal unlawful discrimination court proceedings.

What this means

The effect of the change is that, if an applicant succeeds in the federal court system with a claim of sexual harassment or other unlawful discrimination (including in an appeal), then (generally speaking) the respondent will have to pay the applicant's legal costs.

The Court is not required to order a respondent to pay the applicant's costs if the applicant's own unreasonable act or omission caused the applicant to incur those costs.

Interestingly, the Court may also order an applicant to pay their opponent's costs, if:

• the applicant instituted the proceedings vexatiously or without reasonable cause, or otherwise their unreasonable acts or omissions caused the opponent to incur costs; or
• a respondent is successful in the proceedings, and does not have either a significant power advantage over the applicant, or significant financial or other resources relative to the applicant.

The Court also retains the discretion to apportion costs as it sees fit.

Offering further guidance to the interpretation of the Bill, the Addendum to the Bill's Explanatory Memorandum signals that 'unreasonable act or omission' is intended to be a high bar, reserved for rare cases. For example, a self-represented litigant's lack of legal expertise, refusal to participate in a conciliation or refusal of a settlement offer are not intended to amount to unreasonable acts or omissions. There must be a holistic consideration of the circumstances of an act or omission to determine whether it amounts to an ‘unreasonable act or omission’.

Reasons for the change

This change is designed to remove the costs deterrent that applicants experience when bringing a claim alleging unlawful discrimination (including sexual harassment) in the workplace.

Before this amendment, it has been common practice that costs generally 'follow the event' – meaning that applicants may be liable for their own costs, as well as the costs of the other party, if they are unsuccessful in establishing their claim.

This amendment represents the final step in implementing 55 recommendations made in the Australian Human Rights Commission’s Respect@Work: Sexual Harassment National Inquiry Report (2020). Here is a link to our previous Insight discussing the Respect@Work changes.

What you should do

Employers are already required to take positive steps to make their workplaces free from sexual harassment and other forms of unlawful discrimination. The new amendments provide yet another reason to focus on this issue, as they may lead to more claims being commenced by individuals who are exposed to unlawful behaviour.

For further assistance with discharging the positive duties imposed by anti-discrimination legislation, please contact our Employment and Safety Team.

Authors

Jacquie Seemann | Partner | +61 2 9020 5757 | seemann@tglaw.com.au

Jessica Berghofer | Senior Associate | +617 3338 7928 | jberghofer@tglaw.com.au

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