Crunching the numbers

Maximum claim for sexual assault under NSW criminal compensation laws: $50,000

Kristy Fraser-Kirk’s claim for sexual harassment by former David Jones CEO Mark McInnes: $37,000,000.

17 Responses to “Crunching the numbers

  • 1
    Jeremy
    August 2nd, 2010 19:59

    I think her aim is to make an example of McInnes and the company.

  • 2
    Andrew Norton
    August 2nd, 2010 20:08

    Today’s announcement was certainly successful as a publicity stunt. I have no idea what the legal basis for such a claim could be, and indeed DJ’s share price only went down a little so the markets aren’t taking it too seriously.

  • 3
    Kim
    August 3rd, 2010 08:41

    The suit is civil rather than criminal of course. Nevertheless, the amount claimed is absurd. I recall reading that the supposed basis is a claim for exemplary (as distinct from compensatory) damages of 5% of the company’s annual revenue. It is inconceivable that such an award would be made; only in the US where you have juries for awards of civil damages could this be envisaged. Juries are much more likely to ignore legal principle on the basis of a stirring anti-corporate speech.

    I understand that DJ has a very slender profit margin so 5% of their revenue is likely to exceed their profit.

  • 4
    Baz (Da ordinary aussie)
    August 3rd, 2010 11:23

    I would just like to go on record and say that I am happy to be harrassed by a CEO for half of what this chicky babe / gold digger wants. Hell, I’ll even allow a grope or two!

  • 5
    Son of the Ratpack
    August 3rd, 2010 11:56

    “DJ’s share price only went down a little so the markets aren’t taking it too seriously.”

    The markets sometimes misjudge the importance of events, but more likely they reckon that DJs will settle for an amount south of the 37 mill. The question is then how far south. So far, Fraser-Kirk’s lawyers have played it beautifully. I just love how one of the things she is claiming for is compensation for future intrusion by the media, and she calls a media conference to release her Statement of Claim! Now, that is chutzpah! DJs’ reputation is tanking by the minute over this and they have got no one to blame but themselves. According to the Statement of Claim, four other women (so far, unnamed) reckoned they were sexually harassed. How would you like to be on the DJ Board waiting for more titillating revelations to be carefully released for maximum damage? Then there will be the trial itself, as the CEO takes the stand, and then the Chairman and every other director is forced to take the stand and get grilled about what they knew about the ex CEO’s behaviour and when they knew it. They’re going to want it to go away fast. If they settle quickly 37 mill will be a bargain compared to the cost of their reputation if this thing drags out.

  • 6
    Andrew Norton
    August 3rd, 2010 13:15

    Yes, chutzpah describes Fraser-Kirk’s approach perfectly. I particularly liked it in her media conference yesterday when she attributed her preposterous claim for judicial theft from DJ’s shareholders to being well brought up. No sense of irony at all. Her approach to things suggests she shares far more of McInnes’s personality traits than she would like to believe.

    It’s hard to know whether this will affect DJ’s in any meaningful way. I don’t think the more serious from a corporate perspective charges of ‘corporate paedophilia’ a few years back did observable damage in the end. But Fraser-Kirk is making enough of a nuisance of herself that they will want to pay her piss-off money.

  • 7
    Son of the Ratpack
    August 3rd, 2010 13:59

    Good luck to her. The fact is – and this is not in dispute, AFAIK – she was sexually harassed by McInnes. What is also not in dispute is that he had a reputation as a pants man. What is in dispute is whether the board turned a blind eye because he was good at running the business. Is the amount she is claiming excessive? That depends on how you look at it. It sure looks like it’s larger than the damage that has been caused to her, but that is not the only consideration. It’s also a matter of what it is worth to DJs to make this matter go away. If this matter will cause more than $37 million of damage to DJs then the board would be doing the right thing by the shareholders to pay her $37 million. What would really be chutzpah is if Fraser-Kirk’s lawyers, after they have succeeded in extracting $x million for their client, and a nice cut for themselves, then went after McInnes and the Board with a class action on behalf of the shareholders. There’s a big lesson in this for boards. If your senior execs start feeling up your employees, it’s going to cost you a lot of money. If your company has a sexual harassment policy into the bargain, then it’s going to cost you a hell of a lot of money.

  • 8
    Andrew Norton
    August 3rd, 2010 14:35

    I actually hope she gets <$100K, because we need some perspective on issues like this. Dismissal of the offender plus a payout to the victim in the $25K-$100K range depending on degree of victimhood is plenty for something at the serious misdemeanour end of things.

  • 9
    Jeremy
    August 3rd, 2010 18:29

    On sacking McInnes, the company said that McInnes behaviour towards her was not part of a pattern, whereas she had said, and the board and senior management allegedly knew, that it was.

    That’s what made her flick the switch to Hellcat.

  • 10
    F perspective
    August 3rd, 2010 22:44

    I am happy for KFK to make an example of the company that turned the blind eye to harrassment by the CEO of its juniors. By definition it is not a fair situation, and the employees have limited ways to fight back. The reality is that more senior women than KFK have more to lose by going into a legal battle, and conseqently MANY offenders like McInnes go unpunished, while these senior women endure (1)a threatening work environment, and (2) often diminished career prospects, to the extent that those require the support of the offending senior manager (and in lean hierarchical organisations, your progress depends on a small number of senior people). I hope this is all obvious, but it does not seem so – all the posts on this topic presume this problem is not significant because it is invisible to the authors, but hello, reality. I hope KFK actually goes to court and sets up a new precedent, generating public awareness along the way – this is public service to many other potential victims.

  • 11
    Son of the Ratpack
    August 4th, 2010 06:33

    I didn’t realise until today that KFK’s announcement was designed to do maximum damage to DJ’s launch yesterday of their Spring collection, the annual gathering of air headed celebrities and anorexic models designed to market over priced trash to cashed up bogans. And it worked a treat. I wouldn’t like to be on the other side of KFK’s lawyers. These people are scary.

  • 12
    M
    August 4th, 2010 09:19

    I think the point being made is that DJ’s was prepared to have a CEO who acted inappropriately constantly because he was very good at his job. The success of DJ’s over the last couple of years is undeniable and at least partly driven by the former CEO.

    What other CEO behaviors would be tolerated by a board for the sake of profit?

    Apparently flirting, harassing and feeling up the cute young women was ok.

    Would it be ok if he was prone to Gordon Ramsay style verbal barrages at underlings?

  • 13
    Andrew Norton
    August 4th, 2010 09:39

    M – This is the point that is in dispute. When the board became officially aware of the issue the CEO was gone. The question was whether they were informally aware of his behaviour, and if so whether they should have inquired further.
    There is a grey area here – we cannot ban office romance.

  • 14
    Peter Patton
    August 5th, 2010 21:57

    Well brought up!? Pig’s arse.

    Well brought up people are told, “darling you should only ever appear in the press twice in your entire life. When you are born, and when you die.”

  • 15
    Peter Patton
    August 5th, 2010 21:59

    I hope she gets $1 or, better still, a peppercorn; and has to pay DJ’s costs.

  • 16
    Martha Maus
    August 10th, 2010 13:55

    McInnes was paid $2 million to go away, apparently he was owed about $500k contractually. If DJ’s takes its own policies seriously in any way it’s hard to fathom what the early extra $1.5 million was for. For a practical person this money leads support to any comment that DJ’s policy and practice were/are flawed and that outrageous PR is required to shine a light on these practices for the general public. One has to admire the finess of her craft so far.

  • 17
    Kim
    August 13th, 2010 14:01

    “I hope this is all obvious, but it does not seem so – all the posts on this topic presume this problem is not significant because it is invisible to the authors, but hello, reality. I hope KFK actually goes to court and sets up a new precedent, generating public awareness along the way – this is public service to many other potential victims.”

    Funny, there I was thinking that a private law suit should do corrective justice between the parties rather than be used as a vehicle for social crusades.

    The next time someone dents my car, should I sue them for 5% of their net worth to raise public awareness of reckless driving?

    Even if you favour some massive financial deterrent for this sort of conduct, it should be recognised as punitive in nature and thus be administered under the criminal law. This would afford the appropriate level of procedural protection (eg elevated burden of proof), and would mean that the punitive component of any damages goes to the State. KFK is not entitled to reap a windfall from some function of social deterrence.