September 02, 2010

Horse 1103 - The $37 Million Exercise in Cynicism

http://www.dailytelegraph.com.au/news/national/david-jones-37-million-sex-case-starts-monday/story-e6freuzr-1225911089882

The retail giant's former junior publicist Kristy Fraser-Kirk's record $37 million sexual misconduct claim officially starts in the Federal Court when the retail giant and it's former CEO will be given a deadline to lodge their defences to her allegations.

Personally I hope that this case dies quietly. Not because I think that it is a carriage of justice, because without delving into the facts, it is probably likely that there is quite a strong degree of claim to the case*, but rather that the amount of the claim itself and whom the claim is directed is in my opinion a combination of pure vexatiousness, cynicism and bile.
I have two basic problems with the case in principle, and they are outlined below.

Usually in a punitive damages case, the applicant is hoping to collect damage as a direct result of the damage suffered of the offence in question. That amount is determined by either a calculated loss of income and wages question, and or some degree of emotional suffering.
The point to make here, is that if Ms Fraser-Kirk is making a claim based on her, degree of emotional suffering, is that worth $37 million? Because that $37 million certainly isn't reflective of her lost wages and potential earnings power.
If you work through the logic and assume that Ms Fraser-Kirk was on a wage of $80,000 a year (which from what I can determine is ridiculously overstated), then an average career loss would probably be up to five years maximum. That would equate to a loss in potential wages of $400,000 or just a shade over 1% of what she is claiming. Is the amount that she has suffered worth $36.6 million? I seriously doubt it.

The second issue I have with this case, is that David Jones Ltd is being held liable for the actions of an individual.
http://www.smh.com.au/lifestyle/people/upbeat-mcinnes-flies-back-to-face-the-music-20100815-12574.html
"I did so with great sadness as it was a career and a company I loved, that I had helped rebuild.
However, the reason is simple. It was my responsibility, not David Jones's."
- Mark McInnes, August 16, 2010.

It can be very easily argued that David Jones as an employer has a responsibility to provide a safe workplace, and that includes a workplace which is harassment free. However, the company David Jones Ltd itself is a secondary party in this. I hardly think that its fair, just or logical if as a result of David Jones Ltd losing the case, being forced to pay $37 million in damages, that someone in say a store in the Rundle Mall in Adelaide should lose their jobs due to cutbacks.

I have heard it argued that the reason for claiming an amount as outlandish as $37 million is to "make the company hurt". I find that to be somewhat spiurious, because if it was truly about making someone hurt, wouldn't it be more just to make the actual person who caused the hurt in the first place suffer?

To what extent is David Jones Ltd. implicated anyway? Is it an equal basis? If so then how come Mark McInnes isn't also being chased for $37 million? If it truly is about causing "hurt", then isn't it logical for Mark McInnes to lose his house and go and live in the gutter? The thing is that no-one would conceed that that is a carriage of justice at all, yet somehow it's okay for a company to be pinged for the money? And if it isn't about the money, then why go after the company rather than the individual?

Ms Fraser-Kirk has incidentally promised to give most of the money to charity anyway. So what? If I owe you some money, I can't decide to pay a charity instead of you, because my debt is directly with you, not the charity.
Likewise, the fact that Ms Fraser-Kirk has promised to give most of the money to charity is entirely irrelevant to the case. That is entirely her own business, and the fact that she's been trumpeting this in the media is little more than sensationalism.
Besides which, if she honestly and truly feels that she is in fact entitled to the $37 million, then what is her motive for giving most of it to charity? I would contend that deep down she knows herself that the claim is vexatious and is doing to in order to whitewash over her own guilty conscience.

Whilsy all of this might sound harsh, I should point out that as consumers and taxpayers, we all suffer when repeated vexatious legal damages pass through the courts. It is us who pay through higher prices for goods and services, as well as through higher taxes as a result of courts time and the legal profession's time being employed.
That last point is in my not very well paid opinion the reason why this massive figure was chosen seemingly at random in the first place. No doubt that the legal firm Maurice Blackburn who is representing Ms Fraser-Kirk will be paid on a percentage basis. Obviously it is in their best interests to rip for as much money as they can possibly get.


*I don't condone sexual harassment either in the workplace or otherwise. It should go without saying that harassment of any kind is evil, and it should not be tolerated.

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