Australia: Trial by media: a continuing trend

• The recent dismissal of James Ashby’s sexual harassment case against former Speaker Peter Slipper concludes yet another example of ‘trial by media’.
• On 12 December 2012 the Federal Court handed down its decision dismissing Mr Ashby’s claim in full on the basis that it was an abuse of process, ordering Mr Ashby to pay Mr Slipper's costs.
• This decision is one of a limited number in Australia where a claim of sexual harassment has been dismissed as abuse of process.
• It gives heart that employers may have options to pursue where they suspect a disgruntled individual is pursuing litigation with the primary intent of causing reputational damage to a business or individual or for some other ulterior purpose.

Decision of the Federal Court

Mr Ashby, a former parliamentary staffer and aide to the Speaker, commenced proceedings in the Federal Court against Mr Slipper and his employer, the Commonwealth, alleging adverse action in the form of sexual harassment by Mr Slipper. Mr Ashby also claimed damages for breach of his contract of employment by the Commonwealth, however the Commonwealth settled its claim with Mr Ashby for $50,000 during the course of the proceedings.

The original application filed by Mr Ashby on 20 April 2012 alleged:

• Mr Slipper had sexually harassed Mr Ashby in the course of his employment. The allegations of sexual harassment included a series of sexually provocative text messages between Mr Slipper and Mr Ashby.
• In 2003, Mr Slipper had a relationship of a sexual nature with a young male member of his staff and an encounter between them had been recorded on a video (the 2003 allegations).
• On three occasions during his employment, Mr Ashby had been forced to watch Mr Slipper sign and hand multiple Cab-Charge vouchers to the driver of a vehicle in which they had both travelled, and that Mr Ashby intended to report these matters to the Australian Federal Police (the Cab-Charge allegations).

Judge Rares took into account the following evidence in accepting the application for dismissal for abuse of process:

• The text message exchange between Mr Ashby and Mr Slipper indicated that Mr Ashby had purely political intentions to use the exchange to damage Mr Slipper politically, and did not indicate that Mr Ashby was any way emotionally traumatised or even upset by the exchange¹.
• Even before consulting a lawyer about his allegations, Mr Ashby had confided in Malcolm Brough (who was seeking to contest Mr Slipper’s seat for the Liberal National Party at the next federal election) and had planned with Steve Lewis (a Daily Telegraph journalist) to publish articles about Mr Slipper’s use of travel entitlements shortly before the proceedings were filed².
• Mr Ashby’s lawyers filed a statement claiming that the matter was so urgent that genuine steps could not have been taken to resolve the matters before proceedings were commenced. Hence, Mr Slipper had no prior knowledge of Mr Ashby’s concerns or of the proceeding before they were filed. In addition, the originating application was filed when Mr Slipper would have great difficulty in responding and defending his position as he was travelling overseas³.
• The 2003 allegations and the Cab-Charge allegations were later dropped by Mr Ashby in his statement of claim filed on 15 May 2012. Judge Rares found that such allegations had no legitimate forensic purpose and were included in the originating application to further damage Mr Slipper politically and to attract significant adverse publicity in the media⁴.

After reviewing all of the text messages on Mr Ashby’s mobile phone, as well as considering other evidence, his Honour concluded that the originating application was used by Mr Ashby for the predominate purpose of causing significant public, reputational and political damage to Mr Slipper. He stated that to allow the proceedings to remain in the Court would bring the administration of justice into disrepute among right thinking people and would be manifestly unfair to Mr Slipper⁵.

For these reasons, his Honour found that the proceedings commenced by Mr Ashby were an abuse of process. Mr Ashby was also ordered to pay Mr Slipper’s costs. Mr Ashby has already indicated he is likely to appeal the decision.

What can employers learn from this case?

This case is one of an increasing number of cases where the media has been used to exert pressure on employers, whether in pursuit of a settlement goal or otherwise.

The key cases are well known. In 2008, Christina Rich reportedly received a $5 million settlement for her sexual harassment claim against PricewaterhouseCoopers. In 2011, Susan Spiteri filed proceedings against IBM for $1.1 million claiming sexual harassment and sustained workplace bullying from a manager. In 2012, David Jones’ CEO faced highly publicised allegations of sexual harassment allegations by an employee, Kristy Fraser-Kirk. While the initial claim was for $37 million, it reportedly settled for $850,000. Earlier this year, an employee’s sexual harassment claim against two senior managers at a bank was rejected. Now we have the Ashby saga.

All employers should ensure they are taking steps to prevent sexual harassment by employees through training, education and leadership. Beyond this however, employers can take valuable lessons from the recent history of trial by media cases.

The evidence in this case was primarily derived from text messages to and from Mr Ashby, which proved to be damning evidence of conspiracy to bring down the Speaker. In this case these text messages fell in the employer’s favour, however often the reverse is true. In a digital age where emails, photos, videos and text messages are so easily shared amongst others and on social media, employers should curtail misuse by educating staff on their social media and technology policies (which should also cover the increasing use of personal devices).

Employers should be ready to combat any potential damaging effects of the publicity of sexual harassment allegations by having a public relations plan in place. “No comment” is generally a problematic response which allows news organisations to report allegations without the employer’s version, and long before a hearing. A good public relations response will, in appropriate circumstances, allow the employer’s side of the story to be told quickly and accurately and provide a response to pressure from shareholders and customers.

Employers and individual respondents should also be ready to push back on media organisations if any proposed publication may be defamatory. In a case decided earlier this year, the respondent managers were unable to have their names suppressed in hearing, however they did succeed in their actions for defamation.

Settling a sexual harassment claim may be a commercially sensible decision. Yet there are other options if the cost of settlement is unreasonable (or unpalatable) or the employer decides to take a stand. Making an application for an abuse of process (as Mr Slipper did) is one option. Employers can also consider if the proceedings are vexatious, defamatory or should be struck out (whether in whole or part). Employers should also carefully consider the ability to recover costs and whether steps such as offers of compromise will protect against a costs order.

Finally, if the claim is without substance, employers should gather the evidence to put their case effectively, as recent high profile cases have demonstrated that this can lead to resounding wins for employers.

The Full Decision of Ashby v Commonwealth of Australia (No.4) [2012] FCA 1411 can be found here.

This article was written by Kate Jenkins, Partner, Melbourne and Jae McWilliams, Solicitor, Sydney.

Endnotes

1. See paragraph 35 of the decision.
2. See paragraph 146 of the decision.
3. See paragraph 148 of the decision.
4. See paragraph 153 of the decision.
5. See paragraph 197 of the decision.