Costly refusal to settle out of court

The law firm that was blasted by a Federal Court judge over its conduct in the Peter Slipper sexual harassment case has come in for more criticism over a claim that a client rejected a settlement offer nearly five times more generous than she ultimately received.

Rebecca Richardson won just $18,000 in her $450,000 sexual harassment claim against the software company Oracle and must now foot a substantial proportion of her former employer's legal costs.

But she is standing by Harmers Workplace Lawyers. She has issued a statement thanking the firm, even though Federal Court Justice Robert Buchanan found her case had been "largely misconceived" and that it had been "imprudent and unreasonable" to reject a $55,000 settlement offer.

Ms Richardson turned down offers of $55,000, $25,000 and $85,000 respectively.

Justice Buchanan ordered that, given the adequacy of those offers, she was liable to pay the legal costs incurred by Oracle after the first one on an indemnity basis.

She will also have to foot the legal bill after that point for the man who sexually harassed her. It is likely the bill will be hundreds of thousands of dollars.

Evidence before the court suggested she already owed her lawyers nearly $225,000 before the 21-day hearing in the Federal Court.

In February the court found Oracle was vicariously liable for the treatment of Ms Richardson by her colleague Randol Tucker, who subjected her to "a humiliating series of slurs, alternating with sexual advances … which built into a more or less constant barrage of sexual harassment".

But it rejected her claim for future economic loss as largely misconceived.

Justice Buchanan said it appeared Ms Richardson's decision to turn down Oracle's offer of $85,000 was based on the amount still being inadequate to pay her solicitors. She would have been left with nothing for herself and still owing Harmers $22,000.

"That picture is a disturbing one," Justice Buchanan said. "At this point, whatever the merits of Ms Richardson's claims, the proceedings would have been conducted solely for the financial benefit of her lawyers."

But the court found this should not be taken into account in deciding whether the settlement offers made to her were reasonable.

Harmers was criticised by the same court last year for abuse of process over the way it conducted James Ashby's sexual harassment case against Mr Slipper, the former speaker of the House of Representatives.

Harmers said Justice Buchanan's comments were made in ignorance of the financial arrangement that existed with its client.

Ms Richardson said Harmers had been "incredibly supportive". "That support has been legal, emotional and importantly [with] the financial arrangements concerning my legal fees," she said.

http://www.smh.com.au/nsw/judge-criticises-law-firm-over-rejection-of-settlement-offer-20130428-2imnr.html