A new cost model for Commonwealth Anti-Discrimination Laws will now take effect, shifting the financial onus in discrimination claims to the respondent. The amendment alleviates applicants from the financial burden of an unsuccessful claim, which was often a deterrence for individuals (applicants) commencing proceedings for discrimination or harassment.
The introduced changes go far beyond the recommendation in the 2020 Respect@Work report for equal responsibility for legal costs.
Key feature of the new model
Under the new model:
- The Court must order the respondent to cover the applicant’s costs if the applicant is successful on one or more grounds of their pleadings. The only exception to this is where the applicant’s unreasonable act or omission has caused the applicant to incur costs. Only those costs incurred unreasonably will be excluded.
- Even if the respondent is wholly successful, the Court must not order that the applicant pay the respondent’s costs. In those circumstances, each party will bear their own costs of the proceedings, unless the Court is satisfied that the applicant:
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- Instituted the proceedings vexatiously or without reasonable cause; or
- through an unreasonable act or omission, caused the Respondent to incur costs.1
The new costs model, introduced by the Australian Human Rights Commission Amendment (Cost Protection Bill) 2023, was passed in the Senate on 19 September 2024 and received royal assent on 1 October 2024. The costs model, effective the day after royal assent, does not apply retrospectively to claims brought before 2 October 2024.
These changes represent a significant shift and are likely to open the floodgates to another world of discrimination and sexual harassment claims, increasing applicant appetite to litigate claims.
What this means for employers
For employers, these developments signify a major shift that necessitates a re-evaluation of how discrimination matters are categorised within their organisational risk assessments.
Combined with the Respect@Work amendments, which introduced a positive duty on employers to eliminate all forms of harassment in the workplace, employers should consider:
- Conducting regular workplace training programs for employees on respectful workplace behaviours including unconscious bias, effective communication and dispute management;
- reviewing internal policies and procedures to ensure compliance with positive duty, including by ensuring clear definitions of harassment and discrimination and clear pathways for raising and managing complaints;
- acting quickly to resolve potential claims early, such as through early dispute resolution;
- ensuring the effective and seamless management of claims such as establishing metrics to assess the effectiveness of internal anti-harassment strategies to foster a safe workplace environment through informed adjustments; and
- ensuring all employees have access to support or counselling services such as the Employee Assistance Program (EAP).
Get in touch
At Hamilton Locke, our team is ready to guide you through the implications of the new costs model and help ensure your organisation remains protected. To learn more about how these changes may impact your business, reach out to James Simpson.
