It’s a brave new world. This week’s Full Federal Court appeal decision in Richardson v Oracle Corporation Australia marks a significant shift in the Court’s approach to assessing damages in sexual harassment cases, opening the door to considerably higher awards for compensation.
The trial judge in the Federal Court found that former employee Ms Richardson was sexually harassed by another employee, and awarded her $18,000 in general damages (for her pain and suffering as opposed to economic loss). Oracle was found vicariously liable for the harassing employee’s conduct. The $18,000 damages award was squarely within the range of general damages that are typically awarded in sexual harassment cases of a similar nature where the allegations do not concern physical conduct.
Ms Richardson appealed, arguing that the damages were manifestly inadequate, and out of touch with community standards.
The Full Court agreed, and also referred to a growing appreciation of the detrimental impact that sexual harassment can have on individuals. In bucking the trend of awarding nominal damages in sexual harassment claims, it increased Ms Richardson’s award to $100,000. If you don’t want to do the math yourself, that’s over five times (!) the amount she was awarded at first instance.
The award also means that the 2009 decision of Poniatowska v Hickinbotham in which the employee was awarded $90,000 in general damages for sexual harassment is no longer the aberration that it appeared at the time.
The Full Court also disagreed with the initial judge’s conclusion that Ms Richardson’s resignation from Oracle had nothing to do with the sexual harassment she faced. As result, she was awarded a further $30,000 as compensation for her economic loss.
Will Oracle take the matter to the High Court? Perhaps, but we consider it unlikely that the general damages decision would be overturned. There has long been a chorus that sexual harassment damages don’t meet community standards. Now that the Full Federal Court has responded, we don't think the High Court would intervene.
We’ve entered a new and more costly era of sexual harassment claims. You’ve been warned.