Judge slams law firm over costs in sexual harassment case after employee “financially devastated”

An Australian employee of Oracle who won a sexual harassment case against the software giant in the Federal Court is likely to be left financially devastated after the court criticised her law firm, Harmers Workplace Lawyers, for the costs incurred.

The Federal Court found Oracle was liable to pay program manager Rebecca Richardson $18,000 after finding she was harassed by another employee, Randol Tucker.

Tucker made comments to Richardson such as: “Rebecca, you and I fight so much, I think we were husband and wife in our last life,” and, “How do you think our marriage was? I bet the sex was hot.”

But last week Justice Robert Buchanan ordered Richardson to pay the costs of both Oracle and Tucker after they offered to jointly settle her claim for $55,000 in September 2010, three months after the case had started.

Richardson rejected the offer and as the award of $18,000 was less than the $55,000 she could have got if she settled, Oracle and Tucker are entitled to costs on an indemnity basis.

Justice Buchanan described the result as “very disturbing” and found that at this point “the proceedings would have been conducted solely for the financial benefit of her lawyers”.

“The final outcome of these proceedings, in financial terms at least, will probably be devastating for Ms Richardson both financially and personally.”

The Australian Financial Review reports that by mid-December 2011, Richardson’s costs were already $224,475 so accepting the offer would have left her with nothing.

Harmers Workplace Lawyers has previously come under fire from the courts, with Justice Rares singling out the law firm for scathing criticism for its handling of the case brought by James Ashby against the former Parliament Speaker, Peter Slipper.

The criticism went so far that founder of Harmers Workplace Lawyer, Michael Harmer, asked the Federal Court to let him appeal adverse findings made against him personally.

SmartCompany contacted Harmers Workplace Lawyers for comment but did not receive a response prior to publication.

Charles Power, partner at law firm Holding Redlich, told SmartCompany while the court accepted it was “disturbing” that Richardson’s legal expenses were greater than the settlement offer, it found it wasn’t relevant to the question of whether it was reasonable to reject the offer.

“For applicants who are generally individuals with invariably less means than respondents who are businesses, it shows the risk that you have if the relationship with your lawyer gets out of control,” he says.

“If you have a lawyer who does not give you proper information about how much you are going to be out of pocket for the litigation you are going to be very much exposed.”

Power says the case highlights the risks of failing to accept a settlement offer.

“If you are an applicant and you receive an offer that is not paltry you really face significant risks if you ignore it; you can be ruined,” he says.

“If you are going to reject offers, you need to be putting a lot of pressure on your lawyers to give you the best possible information and opinions about prospects, and what is likely and what is not.”