It’s hard to find too many winners from the Kristy Fraser-Kirk/Mark McInnes imbroglio — certainly not the parties themselves, nor the David Jones shareholders. The only winner from the alleged $850,000 settlement appears to be Fraser-Kirk’s legal team from Harmer’s Lawyers in Sydney, who stand to collect hundreds of thousands of dollars in fees and even more valuable brand awareness.
After paying her own legal costs, it is understood that Fraser-Kirk will take away about $500,000. In the context of Australian s-xual harassment verdicts that is a remarkably large amount (experts suggested that given the allegations, a sum of about $20,000 to $40,000 may have been awarded in court), however, the reputation damage on Fraser-Kirk has been extraordinary.
It is difficult to reach any other conclusion that Fraser-Kirk was poorly advised. Having been offered $850,000, Fraser-Kirk’s legal team spurned the offer and sought a landmark $37 million punitive damages claim. Not only have punitive damages never been awarded by an Australian court for such a matter, the alleged harassment suffered, while inexcusable, would be deemed relatively mild (it does not appear that Fraser-Kirk was not victimised, in fact, her harasser was terminated from his role and the accuser continues to be paid by David Jones).
The claim had the sad effect of transforming Fraser-Kirk from victim of harassment to greedy villain. Unlike in the United States, Australian society tends to scorn wealth, especially that accumulated by what is believed to be undeserving means.
Fraser-Kirk’s initial demand was for $8 million, a figure subsequently reduced to $2 million and then $1.3 million, before she eventually agreed on $850,000 — the exact sum first offered by David Jones. Not only was Fraser-Kirk’s reputation possibly irrevocably damaged, but she received a lower net sum (after legal fees) less than she could have confidentially taken in the first place.
This is where the conflict between client and legal adviser becomes apparent. Had Harmers advised Fraser-Kirk to accept DJ’s initial offer they would have probably been several hundred thousand dollars worse off.
This is not the first high-profile s-xual harassment case involving Harmers that has dragged on for a sustained period. Former PwC partner Christina Rich undertook a three-year $11 million claim against her former employer, alleging s-xual harassment by several partners, airing numerous public claims in the media (as occurred in the McInnes case) before settling for an amount believed to be between $5 million and $6 million. The barrister acting for Rich, Rachel Francois, was also representing Fraser-Kirk in the sometimes-heated Federal Court discussions. The tactics used by Harmers in the Rich case bore a remarkable similarity to those in the Fraser-Kirk matter. In both instances, the complainant used the media to name high-profile business people. In both cases, the matters were eventually settled shortly before the allegations could be tested in court.
Fraser-Kirk initially obtained a wealth of goodwill when she announced that damages would be donated to victims of s-xual harassment. But the carefully worded pledge only applied to punitive damages, rather than compensatory damages. Similarly, Harmers claimed that they would not accept legal fees for the punitive damages part of the claim. Given neither party has made public statements regarding these matters, it may be fair to assume that such donations will not be forthcoming.
After launching her claim, Fraser-Kirk’s claimed “I said it wasn’t OK, because I said that this should never happen to me or to anyone.” After seeing her experience, it isn’t likely that too many victims of harassment will follow a similar path.