Michaelia Cash (WA, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Hansard source

I rise to speak on the Australian Human Rights Commission Amendment (Costs Protection) Bill 2023. It's appropriate to commence my speech by reflecting on the genesis of this bill and the objectives that it should have been achieving, because this is a bill that should be implementing recommendation 25 of the Respect@Work report.

The Respect@Work report made 55 recommendations across a range of areas, the bulk of which have now become law with coalition support. Recommendation 25 came in the context of a discussion about barriers to pursuing general sexual harassment claims in the courts. The discussion in the report is short but clear and dealt with just a few key points. It's worth reflecting on those points which should have been, but which are not, the guiding principles for our discussion today.

First, the commissioner noted submissions recommending a cost protection provision in the Australian Human Rights Commission Act which would:

… provide that applicants and respondents should bear their own costs unless an exception applies—if the court is satisfied that the party instituted proceedings vexatiously or without reasonable cause.

Second, the report cited submissions to the effect that the general rule, which many would know is costs follow the event, operates as:

… a disincentive to pursuing sexual harassment matters under the Sex Discrimination Act.

And third, in response to those submissions, the commissioner acknowledged:

… the risk of cost orders acting as a disincentive to pursuing sexual harassment matters in the federal jurisdiction.

The report specifically and explicitly recommended a new provision along the lines of section 570 of the Fair Work Act, which establishes what is known as a 'costs neutrality model'. Critically, it noted the intended effect of such a provision is as follows:

Such a provision should ensure costs may only be ordered against a party by the court if satisfied that the party instituted the proceedings vexatiously or without reasonable cause, or if the court is satisfied that a party's unreasonable act or omission caused the other party to incur costs.

The discussion in the report specifically and expressly made clear that the provision was about limiting the circumstances in which a complainant can be made to pay costs. It recommended a provision that means that, as a default, each party bears their own costs, except where they act vexatiously or unreasonably. In other words, it is a protective provision.

What this bill does, though, is take a fundamentally different approach. It does not implement recommendation 25 of the Jenkins report. The bill does not implement a regime that is directed towards harassment and discrimination claims under the Sex Discrimination Act. This bill does not implement a provision modelled on section 570 of the Fair Work Act, and it does not deal with sexual harassment in the workplace. In other words, it doesn't do what Kate Jenkins told the Australian parliament it needed to do. Instead, this bill applies to all federal discrimination matters. This means that, in due course, it will potentially apply to religious institutions and schools, if the government decides to pursue its disastrously flawed religious discrimination bill, which Mr Albanese, I understand, still has not shown his caucus.

This bill implements the hopelessly ideological model called a modified equal access model. Now, the word 'modified' is important here because this model is not about equal access at all. Indeed, the words 'equal access' are in quotation marks in the government's own materials because the Attorney-General of Australia knows full well that there is nothing equal about it. It is actually an unequal access model, and we need to be very, very clear about that. It does not remove barriers in a way that preserves the integrity of litigation and the discretion of the courts. Instead, it ensures that, in court, the balance is tilted in favour of complainants, regardless of the nature of the complaint and the conduct of the proceedings.

The bill also takes an extraordinary approach that goes much further than any other Australian jurisdiction and, in fact, any other comparable nation. It's appropriate to run through how this bill will work in practice and, for simplicity and clarity, I'll refer to the person commencing the litigation as the complainant.

The courts at present make costs orders to reflect on the conduct of the proceedings, the merits of the parties' positions and the ultimate outcome. The courts make costs orders that give best effect to justice in the case. This is a fair approach and it is a reasonable approach, and we know that our judges—hardworking, talented and unimpeachably fair and independent—do not take their responsibilities lightly. What this bill does, however, is take that discretion away from them. The bill says that the court must award costs to a complainant if they are successful—and the key here is these words—on one or more grounds. This rule applies in all cases except in relation to costs incurred as a result of a complainant's unreasonable act or omission.

The bill also says that the court must not award costs against the complainant unless some very narrow exceptions are met. What are these exceptions? The court is only permitted to exercise a discretion to award costs to a respondent where the complainant instituted the proceedings vexatiously or without reasonable cause, or the complainant's unreasonable acts or omissions caused the respondent to incur costs, or the respondent is successful in the proceedings, does not have a significant power advantage and does not have significant financial or other resources relative to the complainant. Crucially, the bill would apply to class action proceedings and actions brought by trade unions. Extraordinarily, the drafting of the provisions leaves open the possibility that the respondent must pay the costs incurred by the complainant even in respect of grounds that were unsuccessful. What does this actually mean in practice? In short, the bill incentivises litigation and disincentivises negotiated outcomes. It removes all real risks from the complainant provided they do not meet the very high bar—and it is a very, very high bar in law—of acting unreasonably.

This bill even removes the provision that expressly allows the court to take into account offers to settle. In fact, this is an unprecedented change to how settlement negotiations will work. Right now, the courts can take into account cases where a respondent makes a reasonable offer to settle. I would argue—in fact, the status quo is—that that is actually fair. But let's say you're responding to a claim, and you make a genuine effort to resolve it on fair and reasonable terms so that both parties avoid the costs of litigation. But then I insist on my day in court, and I might even win. If I do that, of course, it puts on both parties a great deal of expense which is entirely avoidable. A fair person might say, 'Hold on, why should you pay if I'm the one insisting on litigation that turns out to be unnecessary?' This is what the courts can do right now. They make cost orders very carefully so that, as far as possible, the process itself does not become a punishment. All that changes under this bill. The bill removes the provision that gives the courts the discretion to take those things into account. In fact, it sends a clear message that a complainant who rejects a reasonable settlement offer should not be at risk of an adverse costs order.

Further, the bill leaves open the possibility that the respondent must pay even in respect of grounds that are unsuccessful, because all of this is part of the same proceeding. If you are successful on any ground, you recover all of your costs, and, if you lose completely, all you have to do is bear your own costs. If you make 20 claims and succeed in just one, this bill leaves open the possibility that the respondent will be forced to pay for all of them. This means there is no downside to pressing ahead with a low-prospect claim. Talk about clogging up the court system! Of course, this can be exploited in class actions—and class action law firms, as we all know, are the Australian Labor Party's friends. It is no accident that Maurice Blackburn and Slater and Gordon spend millions in donations to the Australian Labor Party. And it is no accident that you will see photos of CFMEU officials in hi-vis vests with the CFMEU logo on one side and—lo and behold—the Maurice Blackburn logo on the other. This bill, by any analysis, is a litigation funder's dream. It is a class action lawyer's meal ticket and a trade union's golden pathway. All you will need to do is drum up a low-value or speculative complaint and resist all attempts at conciliation in the Australian Human Rights Commission. Then, once you're in the courts, guess what? You simply press ahead with your ambit: a low-value and speculative claim. As long as you're not unreasonable or vexatious, you can slowly bleed the respondent as you drag out the litigation, knowing it's quite unlikely, because of the Australian Labor Party and this bill, that you will face consequences. Of course, there's nothing in this bill to prevent these types of actions being abused collaterally to pressure a respondent into whatever negotiations or other matters are going on.

But wait: there's more. There's a genuine concern that this approach doesn't end with discrimination matters. In fact, the drafting is so broad that it includes any other proceedings that relate to those proceedings. This means that there is a genuine concern that this unequal-access model will also apply to any other claims in the same matter that arise under federal law or in the accrued jurisdiction. In fact, the committee received evidence and saw clear citations to case law that made this precise point.

The way it plays out is this. Let's say I make a complaint about reasonable adjustments under the Disability Discrimination Act and then, as part of the same matter, I also make some kind of damages claim or an industrial claim. The genuine fear, based on precedent, is that all those provisions will be covered by this controversial and unbalanced cost regime because they relate to a discrimination claim. The overreach means that those who respond to claims—not just employers but also bodies like schools, TAFEs, professional colleges, hospitals and sporting clubs—will all now face a much higher litigation risk, and it is only a matter of time before that translates into higher insurance premiums and higher costs to the families who love and benefit from those community institutions. It is sloppy—or insidious—and makes a mockery of the Jenkins report.

So, what should the bill have done? It should have implemented recommendation 25 of the Respect@Work report. It should have had support across this chamber. It should have created a simple cost-neutral jurisdiction in our federal courts to remove barriers to women to deal with sexual harassment in the workplace. It should have meant that the same rules apply whether you pursue a sexual harassment claim in the Fair Work Commission or in the Federal Court. Instead, we have a model that goes further than any comparable jurisdiction and applies to any type of claim under discrimination law or that relates to such a claim. The overreach is inexplicable, and we should find a better way forward.