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2023
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
AUSTRALIAN HUMAN RIGHTS COMMISSION AMENDMENT (COSTS
PROTECTION) BILL 2023
EXPLANATORY MEMORANDUM
(Circulated by authority of the
Attorney-General, The Hon Mark Dreyfus KC MP)
ABBREVIATIONS USED IN THE EXPLANATORY MEMORANDUM
Acts Interpretation Act Acts Interpretation Act 1901
Applicant A person (or representative of a person, for example where a
representative organisation makes a complaint on behalf of a
person or several persons) who has allegedly been
discriminated against and is making a complaint to the
Australian Human Rights Commission or court.
Commission Australian Human Rights Commission
AHRC Act Australian Human Rights Commission Act 1986
Bill Australian Human Rights Commission Amendment (Costs
Protection) Bill 2023
Fair Work Act Fair Work Act 2009
FC Act Federal Court of Australia Act 1976
FCFCA Act Federal Circuit and Family Court of Australia Act 2021
Federal courts Federal Court of Australia and Federal Circuit and Family
Court of Australia
Free and Equal Position Free and Equal: A reform agenda for federal discrimination
Paper laws - Position Paper (2021)
National Inquiry National Inquiry into Sexual Harassment in Australian
Workplaces
Respect@Work Bill Anti-Discrimination and Human Rights Legislation
2022 Amendment (Respect at Work) Bill 2022
Respect@Work Report Respect@Work: National Inquiry into Sexual Harassment in
the Workplace (2020)
Respondent A person or organisation (or both, for example where a person
and a corporate entity as an employer are named as
respondents) that has allegedly discriminated against the
applicant.
Sex Discrimination Act Sex Discrimination Act 1984
Victim-survivor Given that the terms used to describe a person's experiences
following sexual harassment and discrimination are personal,
the term 'victim-survivor' has been chosen to ensure the paper
is inclusive of different experiences and preferences.
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AUSTRALIAN HUMAN RIGHTS COMMISSION AMENDMENT (COSTS
PROTECTION) BILL 2023
GENERAL OUTLINE
1. The Government is addressing sexual harassment in Australian workplaces and
implementing all recommendations of the Respect@Work Report. This Bill would
achieve the objectives of recommendation 25 of the Respect@Work Report.
2. This Bill would amend the AHRC Act to insert a modified 'equal access' cost
protection provision to apply consistently across federal anti-discrimination laws.
This reform is designed to alleviate the barrier to justice that the risk of an adverse
costs order currently poses for applicants in federal unlawful discrimination court
proceedings. Additionally, the Bill will provide greater certainty regarding costs to
all parties involved in such proceedings.
3. The National Inquiry that informed the Respect@Work Report heard that the current
cost regime in the federal courts operates as a significant disincentive for applicants
to pursuing sexual harassment matters under the Sex Discrimination Act. The
current practice, in which costs generally follow the event (despite a broad judicial
discretion to award costs in any manner seen fit under section 43 of the FC Act and
section 214 of FCFCA Act), means that applicants may be liable for their own costs,
as well as those of the other party, if they are unsuccessful. The risk of being ordered
to pay the costs of other parties to the proceedings can deter victim-survivors of
sexual harassment and other forms of discrimination from commencing legal
proceedings. This creates access to justice concerns, particularly for vulnerable
members of the community. In response, the Respect@Work Report recommended
that a cost protection provision be inserted in the AHRC Act to provide greater
certainty for applicants.
4. The Bill differs from the model recommended in the Respect@Work Report, which
proposed an amendment based on section 570 of the Fair Work Act. The Fair Work
Act provides that costs may only be ordered against a party if the court is satisfied
that the party instituted the proceedings vexatiously or without cause, or if the court
is satisfied that a party's unreasonable act or omission caused the other party to incur
costs. The Bill adopts a modified 'equal access' approach adopting the requirements
of the equal access model but adding the ability to award costs against an applicant
in circumstances where the respondent has been successful on all grounds, the
respondent does not have a significant power advantage over the applicant and the
respondent does not have significant financial or other resources, relative to the
applicant. This model achieves the policy objective of recommendation 25 of the
Respect@Work Report. This approach balances the interests of applicants and
respondents in unlawful discrimination proceedings while not impacting applicants'
access to legal representation.
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Where an applicant can be ordered to pay the respondent's costs
5. This Bill would address the concerns raised by the Respect@Work Report by
protecting applicants from an award of costs against them in unlawful discrimination
proceedings except in certain circumstances. This means that where an applicant is
unsuccessful on all grounds, parties would generally bear their own costs. The
particular circumstances where the court may order that an applicant pay another
party's costs are where it is satisfied that:
• the applicant instituted the proceedings vexatiously or without reasonable cause;
or
• the applicant's unreasonable act or omission caused the other party to incur the
costs; or
• all of the following apply:
o the other party is a respondent who was successful in the proceedings;
o the respondent does not have a significant power advantage over the
applicant;
o the respondent does not have significant financial or other resources,
relative to the applicant.
6. The prospect of an adverse cost order can exacerbate existing financial and power
disparities between an individual applicant and certain respondents such as large
corporations or well-resourced individuals. The equal access model in this Bill
would address these power imbalances and resource disparities, which are present in
most unlawful discrimination proceedings. However, the equal access model has
been modified to reduce the burden on respondents who are successful on all
grounds and are not well-resourced or at a significant power advantage relative to
the applicant, such as some individuals or small businesses. The court would also
maintain its discretion to apportion costs as it sees fit.
7. The other circumstances above provide sufficient safeguards against the possibility
of incentivising the making of unmeritorious claims. This is in addition to the
existing safeguards against unmeritorious claims in place in the AHRC Act.
Where a respondent must be ordered to pay the applicant's costs
8. This Bill would also provide further protection for applicants in discrimination
proceedings by ensuring that where an applicant is successful in proceedings on one
or more grounds against a respondent, the court must order that the respondent pay
the applicant's costs. This provision would mean that where an applicant is
successful on one or more grounds against a respondent, the court cannot make no
order as to costs. However, if the court is satisfied that the applicant's unreasonable
act or omission caused the applicant to incur costs, the court is not required to order
the respondent to pay the costs incurred as a result of that act or omission.
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Representative applications
9. The Bill would also apply to representative applications, noting the court would be
prevented from awarding costs against a person on whose behalf the application has
been made. Representative organisations would have greater certainty about the
costs they would be required to pay if they commence legal proceedings on behalf of
others. This may also encourage public interest litigation in unlawful discrimination
matters.
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Figure 1: Visual representation of the modified 'equal access' model
Applicant Respondent
Successful on one or Unsuccessful in the
more grounds proceedings
Court must order that the respondent pay the applicant's costs (subsection
46PSA(2)). However, if the court is satisfied that the applicant's unreasonable act or
omission caused the applicant to incur costs, the court is not required to order the
respondent to pay the costs incurred as a result of that act or omission (subsection
46PSA(4)).
Unsuccessful on all Successful in the
grounds proceedings
Parties would generally bear their own costs. The applicant must not be ordered to pay the respondent's costs
(subsection 46PSA(5)) unless the court is satisfied that one of the exceptions in subsection 46PSA(6) applies.
If the Court is satisfied that one of the following exceptions applies, the applicant may be ordered to pay the
respondent's costs (subsection 46PSA(6)):
• the applicant instituted the proceedings vexatiously or without reasonable cause (paragraph 46PSA(6)(a)); or
• the applicant's unreasonable act or omission caused the other party to incur the costs (paragraph
46PSA(6)(b)); or
• all of the following apply:
i. the other party is a respondent who was successful in the proceedings;
ii. the respondent does not have a significant power advantage over the applicant;
iii. the respondent does not have significant financial or other resources, relative to the applicant
(paragraph 46PSA(6)(c)).
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FINANCIAL IMPACT
10. N/A
REGULATORY IMPACT STATEMENT
11. Consistent with the Government's Regulatory Impact Analysis requirements, the
Respect@Work Report has been certified by the Attorney-General's Department as
meeting the requirements of a Regulatory Impact Statement (OBPR22-02584). The
Respect@Work Report was tabled in the House of Representatives on 5 March 2020
and is available online at: https://humanrights.gov.au/our-work/sex-
discrimination/publications/respectwork-sexual-harassment-national-inquiry-report-
2020.
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STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Australian Human Rights Commission Amendment (Costs Protection) Bill 2023
1. This Bill is compatible with the human rights and freedoms recognised or declared in
the international instruments listed in section 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011.
Overview of the Bill
2. This Bill would amend the Australian Human Rights Commission Act 1986 (AHRC
Act). It would also make consequential amendments to the Federal Circuit and
Family Court of Australia Act 2021 and the Federal Court of Australia Act 1976.
3. The Australian Human Rights Commission (the Commission) released the
Respect@Work: National Inquiry into Sexual Harassment in the Workplace (2020)
Report (Respect@Work Report) on 5 March 2020. The Respect@Work Report
considered the risk of an adverse costs order is a significant disincentive for
victim-survivors to commence unlawful discrimination court proceedings. The cost
protection reform made by this Bill is critical to alleviate the barrier to justice that
adverse costs risks currently pose in federal unlawful discrimination proceedings.
4. The Bill would insert a modified 'equal access' cost protection provision in the AHRC
Act to provide greater certainty to parties during court proceedings in relation to costs,
which would achieve the objective of recommendation 25 of the Respect@Work
Report. The costs protection reform would apply to all complaints of discrimination
under federal anti-discrimination law, across all protected attributes and all areas of
public life covered by those laws.
5. The Bill would provide an applicant cannot be ordered to pay the respondent's costs
except in certain circumstances. An applicant may be ordered to pay the respondent's
costs if the court is satisfied the applicant instituted the proceedings vexatiously or
without reasonable cause, or the court is satisfied the applicant's unreasonable act or
omission caused the other party to incur the costs. In addition, an applicant may be
ordered to pay the respondent's costs if the respondent has been successful on all
grounds in the proceedings, the respondent does not have a significant power
advantage over the applicant and the respondent does not have significant financial or
other resources, relative to the applicant.
6. If the applicant is successful in proceedings on one or more grounds, the court must
order that the respondent pay the applicant's costs. However, where the court is
satisfied that the applicant's unreasonable act or omission caused the applicant to incur
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costs, the court is not required to order the respondent to pay the costs incurred as a
result of that act or omission.
Human rights implications
7. This Bill engages the following rights:
a. the right to an effective remedy in Article 2(3) of the International Covenant
on Civil and Political Rights (ICCPR), Article 6 of the Convention on the
Elimination of All Forms of Racial Discrimination (CERD), Article 2 of the
Convention on the Elimination of All Forms of Discrimination Against Women
(CEDAW) and implicitly required in Article 4 of the Convention of the Rights
of Persons with Disabilities (CRPD); and
b. the right to equality and non-discrimination in Article 2, 16 and 26 of the
ICCPR.
Right to effective remedy
8. Article 2(3) of the ICCPR, Article 2 of the CEDAW and Article 6 of CERD provide
the right to an effective remedy for persons who have suffered human rights violations
by Australian authorities, as well as persons who have suffered discrimination
perpetrated by Australian authorities. Article 4 of CRPD implicitly requires effective
remedies be available. The UN Human Rights Committee has stated the right to an
effective remedy encompasses an obligation to bring justice to perpetrators of human
rights abuses, including discrimination, and also to provide appropriate reparation to
the persons who have suffered human rights abuses.
9. Item 3 in Schedule 1 of the Bill engages the right to an effective remedy by inserting a
cost protection provision in the AHRC Act. This amendment will provide people who
have experienced unlawful discrimination with a greater degree of certainty over the
costs they would be required to pay if they commence legal proceedings, particularly
where the respondent has a significant power or financial advantage over that person.
This would alleviate one of the key barriers to accessing justice for victim-survivors of
unlawful discrimination and promote the right to an effective remedy.
Right to equality and non-discrimination
10. Article 2, 16 and 26 of the ICCPR protect the right to equality and non-discrimination
by providing that all individuals have the same rights and deserve the same level of
respect, regardless of their personal attributes such as race, sex, disability, age or
colour (among other attributes).
11. Item 3 of Schedule 1 promotes the right to equality and non-discrimination by
increasing access to justice for victim-survivors of unlawful discrimination. This
amendment will alleviate the barrier that the risk of an adverse costs orders currently
pose in unlawful discrimination proceedings. This will ensure that victim-survivors of
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unlawful discrimination are not deterred by the significant financial risk that adverse
costs orders currently pose when enforcing their right to equality and non-
discrimination, particularly in circumstances where a respondent has a significant
power or financial advantage over a victim-survivor. This will ultimately strengthen
Australia's anti-discrimination framework and help achieve its objective of
eliminating all forms of discrimination.
Conclusion
12. The Bill is compatible with human rights because it promotes the protection of human
rights and, to the extent that it may operate to limit human rights, the limitations are
reasonable, necessary and proportionate to achieve legitimate objectives.
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NOTES ON CLAUSES
Preliminary
Clause 1 - Short title
1. This clause provides that the Bill, when passed, may be cited as the Australian
Human Rights Commission Amendment (Costs Protection) Act 2023.
Clause 2 - Commencement
2. This clause provides for the commencement of the whole of the Act the day after the
Act receives the Royal Assent.
Clause 3 - Schedules
Schedule 1 - Amendments
Part 1 - Main amendments
Australian Human Rights Commission Act 1986
Items 1 - 2
Subsection 46PH(2A)
3. Subsection 46PH(2A) of the AHRC Act would be amended to require a termination
notice issued by the President of the Commission under subsection 46PH(2) to
explain that the courts can award costs 'in certain circumstances'. The addition of
the language 'in certain circumstances' reflects the new cost protection provision
that would be inserted by the Bill (section 46PSA), which would constrain the
court's discretion to award costs in the ways described under 'item 3' below.
Subsection 46PO(4) (notes 1 and 2)
4. The notes under subsection 46PO(4), which direct the reader to the relevant
provisions of the FC Act and FCFCA Act that cover how the court may award costs,
would be amended to explain that the courts can award costs 'in certain
circumstances'. The addition of the language 'in certain circumstances' reflects the
new cost protection provision that would be inserted by the Bill (section 46PSA),
which would constrain the court's discretion to award costs in the ways described
under 'item 3' below.
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Item 3
Section 46PSA - Costs
5. Section 46PSA of the AHRC Act would be repealed and replaced with a new cost
provision. The new provision would apply to unlawful discrimination proceedings
commenced under Part IIB, Division 2 of the AHRC Act in the federal courts, as
well as to appeals pursued in the High Court.
6. A respondent in federal unlawful discrimination proceedings will be liable for the
applicant's costs where the applicant is successful in the proceedings on one or more
grounds. Subsection 46PSA(2) provides the court must order each respondent
against whom the applicant is successful to pay the applicant's costs. However,
subsection 46PSA(4) provides that if the court is satisfied that a successful
applicant's unreasonable act or omission caused the applicant to incur costs, the
court is not required to order the respondent to pay the costs incurred as a result of
that act or omission.
7. The Bill provides that as a default position the applicant must not be ordered by the
court to pay costs incurred by another party to the proceedings (subsection
46PSA(5)). An applicant in federal unlawful discrimination proceedings will only be
liable for the respondent's costs in the limited circumstances set out in subsection
46PSA(6). This includes where the court is satisfied that the applicant instituted the
proceedings vexatiously or without reasonable cause; or the court is satisfied that the
applicant's unreasonable act or omission caused the other party to incur the costs; or
where a respondent has been successful on all grounds in the proceedings, the
respondent does not have a significant power advantage over the applicant and the
respondent does not have significant financial or other resources, relative to the
applicant.
Scope
Subsection 46PSA(1)
8. Subsection 46PSA(1) provides the cost protection provision applies to proceedings,
including an appeal, that relate to an application made by the applicant under section
46PO to a terminated complaint.
9. This means the cost provision would apply to all unlawful discrimination matters
that proceed to court - not just sexual harassment matters, and not just matters
relevant to the Sex Discrimination Act.
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When respondent liable for costs
Subsection 46PSA(2)
10. Subsection 46PSA(2) provides that if the applicant is successful in the proceedings
on one or more grounds, the court must order each respondent against whom the
applicant is successful to pay the applicant's costs, subject to subsection (4). The
court maintains the discretion to apportion costs as it sees fit. This may include
orders allocating some or all of the costs to the applicant depending on the
circumstances of the case. For example, if the court considers it appropriate, it could
order that the respondent pay 80% of the applicant's costs.
11. This provision would provide applicants with greater certainty that the court must
make an order as to costs in the applicant's favour if they are successful in the
proceedings on one or more grounds. This would increase access to justice as
applicants would recover costs they would be required to pay if they commence
legal proceedings. They would therefore be less likely to be deterred from
commencing proceedings, as they would have greater certainty that they would not
be at risk of paying a respondent's costs if unsuccessful.
Subsection 46PSA(3)
12. Subsection 46PSA(3) provides that the court may order that the costs to be paid by
the respondent be assessed on an indemnity basis or otherwise. Indemnity costs
orders are only warranted in certain circumstances and include all of the other
party's costs that have been reasonably and properly incurred. The court retains the
discretion to order costs on an indemnity basis where it considers this appropriate.
The court also retains the discretion to apportion costs as it sees fit.
Subsection 46PSA(4)
13. If the court is satisfied that a successful applicant's unreasonable act or omission
caused the applicant to incur costs, the court is not required to order the respondent
to pay the costs incurred as a result of that act or omission. For example, subsection
46PSA(4) could apply where the applicant has unreasonably caused unnecessary
delays in proceedings, failed to comply with court orders and rules, or otherwise
abused the processes of the court. This is intended to be a high threshold and
reserved for rare cases. For example, a mere refusal of a settlement offer, refusal to
participate in a conciliation, the running of novel arguments or a self-represented
litigant's lack of legal expertise are not intended to amount to an unreasonable act or
omission.
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When applicant liable for costs
Subsection 46PSA(5)
14. Subject to subsection 46PSA(6), subsection 46PSA(5) provides that as a default
position the applicant must not be ordered by the court to pay costs incurred by
another party to the proceedings. This recognises the beneficial intent of
anti-discrimination legislation and the public interest associated with having
discrimination laws enforced to protect those discriminated against. These
proceedings also benefit the community through contributing to the development of
anti-discrimination jurisprudence.
Subsection 46PSA(6)
15. Subsection 46PSA(6) provides that the court can depart from the default position
outlined in subsection 46PSA(5) and order that the applicant pay costs incurred by
another party to the proceeding, if it is satisfied that one of the exceptions under
paragraphs 46PSA(6)(a)-(c) applies. These exceptions are:
• where the court is satisfied that the applicant instituted the proceedings
vexatiously or without reasonable cause (subsection 46PSA(6)(a)); or
• the applicant's unreasonable act or omission caused the other party to
incur the costs (subsection 46PSA(6)(b)); or
• all of the following apply:
o the other party is a respondent who was successful on all grounds
in the proceedings;
o the respondent does not have a significant power advantage over
the applicant;
o the respondent does not have significant financial or other
resources, relative to the applicant (subsection 46PSA(6)(c)).
16. A 'respondent who was successful in the proceedings' in paragraph 46PSA(6)(c) is
intended to mean that the respondent has had all claims against them dismissed. That
is, the applicant has not been successful against the respondent on any ground. The
words "in the proceedings" are intended to refer to substantive success in the
proceeding, and the outcome of procedural or other applications should not prevent a
respondent who has had all claims against them dismissed meeting the threshold in
paragraph 46PSA(6)(c).
17. In regards to an order under paragraph 46PSA(6)(c), the court must be satisfied that
all three circumstances apply. This will require a consideration of whether the
respondent has a significant power advantage over the applicant, and whether the
respondent has significant financial or other resources, relative to the applicant. The
equal access model itself inherently addresses the power imbalance and resource
disparities, which are present in most unlawful discrimination proceedings, by
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limiting applicants' liability for costs except in limited circumstances. The court
retains the discretion to apportion costs as it sees fit. Paragraph 46PSA(6)(c) only
applies to a respondent who has been successful in the proceedings on all grounds.
18. Under subparagraph 46PSA(6)(c)(ii), the court must consider whether the
respondent has a significant power advantage over the applicant. For example, the
respondent may have a significant power advantage where the respondent is an
individual applicant's employer. The term power advantage is intended to be broad
and include consideration of historically unequal power relations as well as social
and cultural power imbalances and organisational power imbalances. For example, a
senior, older or longstanding employee may have a significant power advantage over
a junior, younger or new employee. Other factors such as a hierarchical workplace
culture or industry and the employee's conditions of employment can also be
relevant. This consideration has specifically been included to reflect that the
resource and power disparities between applicants and respondents in unlawful
discrimination matters are not limited to financial resources, but instead can reflect
structural inequalities.
19. Under subparagraph 46PSA(6)(c)(iii), the court must consider whether the
respondent has significant financial or other resources, relative to the applicant. For
example, a respondent may have limited financial resources, because they are a
small business or an individual respondent with limited assets, revenue streams or
other resources. Of note, the exception in this paragraph would only apply where a
respondent is successful in proceedings on all grounds. The intention of paragraph
46PSA(6)(c) is to reduce the burden on successful respondents that are not well-
resourced and not at a power advantage over the applicant. If a respondent seeks to
rely on paragraph 46SA(6)(c), the respondent would need to provide evidence of
their financial position. This modification to the equal access model has been made
to strike the appropriate balance between alleviating barriers to accessing justice for
applicants in anti-discrimination proceedings and the burden on respondents.
Representative applications
Subsection 46PSA(7)
20. Subsection 46PSA(7) provides that in the case of a representative application, if the
court makes an order as to costs under subsection 46PSA(6), the order can only be
made against the representative body and not the individuals on whose behalf the
application is made. This amendment would mean that in making the representative
application, the representative body is accepting the risks associated with pursuing
discrimination complaints in court. No costs order can be made against the persons
on whose behalf the application is made in their individual capacities. This
amendment is appropriate given that in the case of a representative application, the
representative body has made the application on the behalf of one or more persons
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and has offered to take on the risks of litigation, including costs, often in the public
interest.
Part 2 - Consequential amendments
FCFCA Act
Items 4 - 5
21. New subparagraph 214(1)(b)(ia) of the FCFCA Act provides that the court's
jurisdiction to award costs in proceedings does not apply to proceedings brought
under Division 2 of Part IIB of the AHRC Act (redress for unlawful discrimination).
This amendment ensures that the new cost provision in section 46PSA of the AHRC
Act applies to unlawful discrimination proceedings in the Federal Circuit and Family
Court of Australia (Division 2).
22. As a result of this amendment, new Note 1A would be inserted below existing Note
1 in subsection 214(1) to direct attention to section 46PSA of the AHRC Act, which
is the relevant cost provision for unlawful discrimination proceedings.
FC Act
Item 6
23. New paragraph 43(1)(aa) of the FC Act provides that the court's jurisdiction to
award costs in proceedings is subject to section 46PSA of the AHRC Act. This
amendment ensures that section 46PSA of the AHRC Act applies to unlawful
discrimination proceedings in the Federal Court of Australia.
Part 3 - Application of amendments
Item 7
24. Item 7 provides that the amendments that would be made to subsection 46PH(2A) of
the AHRC Act apply in relation to any notice under subsection 46PH(2) of that Act
given after the commencement of this item. Despite the amendments that would be
made to section 46PSA of the AHRC Act, this section would continue to apply, in
relation to any application made under subsection 46PO(1) of that Act before the
commencement of this Bill, as if those amendments had not been made.
25. Despite the amendments that would be made to the FCFCA Act and FC Act, these
Acts continue to apply to proceedings in respect of an application made under
subsection 46PO(1) of the AHRC Act before the commencement of this Bill, as if
those amendments had not been made.
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26. It is necessary to provide for these arrangements so that the inclusion of the cost
protection provision does not have unintended consequences for parties who are part
way through a complaints process involving a complaint of unlawful discrimination
when the Bill commences.
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