The radical legal approach undertaken earlier this week by 27-year-old publicist Kristy Fraser-Kirk in her $37 million punitive damages claim against David Jones could be a bonanza for local charities.
Fraser-Kirk made national headlines launching a spectacular claim against both the former chief executive of David Jones, Mark McInnes, and the board of the retailer claiming the former chief made unwelcome sexual advances and comments to her at two separate functions.
In her statement of claim filed in the Federal Court on Monday, Fraser-Kirk said any punitive damages money she wins "would be paid to charity assisting persons in the area of sexual harassment and bullying as nominated by the applicant”.
Many senior figures in legal circles have already expressed scepticism that Fraser-Kirk will succeed in winning an amount anywhere close to $37 million. Joydeep Hor, a former managing partner at Harmers – Fraser-Kirk’s legal firm – said in The Australian on Tuesday that it was highly unlikely the action would succeed, saying "I am not aware of any court that has awarded punitive damages for sexual harassment”.
But charity experts are keen to let it be known that precedents of successful charity donations in damages cases do exist overseas.
Wendy Scaife, a senior research fellow at QUT’s Australian Centre for Philanthropy and Non-Profit Studies, says donating the spoils of damages cases to charity is becoming more common.
"The most well known examples of this are with celebrities and the Royal Family in the UK, who often donate damages to charity. Nonetheless, she would be in a position to deepen the work of any charity she chooses. Charities generally have bigger ambitions than they have resources, so a donation of this size would be put to good use,” she says.
Though Fraser-Kirk’s charitable intentions are clear, a range of questions concerning the specifics of her charity plans have arisen in recent days.
Despite Fraser-Kirk’s ambition to nominate a suitable charity, no clear approximate to a support organisation for ‘sexual harassment and bullying’ currently exists, charity sector specialists say.
"I don’t know of any particular charities that deal specifically with those issues, but there would be some that run programs that assist people facing workplace harassment and bullying,” said Gina Anderson, CEO of Philanthropy Australia.
At Fundraising Institute of Australia, a peak body for charity fundraisers, CEO Chris McMillan says the closest thing to an organisation that deals with sexual harassment and bullying is the telephone counselling service Lifeline.
Lifeline spokesman Chris Wagner said the organisation had not been contacted by Fraser-Kirk, but added that any funding of that size would be put to good use. He said Lifeline recently lost a government contact to run a helpline specifically for victims of domestic violence and sexual assault.
And though Fraser-Kirk says in her claim she wishes to nominate a charity, her spokesman Anthony McClellan told Business Spectator on Friday a new charity could be set up with the proceeds of any payout.
According to McClellan: "One hundred per cent of any punitive damages, if awarded, will go to either an existing charity or a new one to be set up or a combination of both...If a new one is set up there will be transparency and integrity processes put in place.”
Experts in the field suggest with sizeable donations – anything over $5 million – the benefactor is more likely to be directly involved often to the point of creating a sole-purpose charity organisation.
Perhaps the most significant Australian example of damages being donated to a charity came in 2008, when Pan Pharmaceuticals founder Jim Selim gifted $1 million of a $55 million payout from the federal government to the Leukemia Foundation. Selim died after a stroke and long battle with Leukemia in May.
In March, Prince William’s girlfriend Kate Middleton donated the £5,000 she was awarded in damages from a paparazzo who distributed pictures of her playing tennis.
After Brad Pitt and Angelina Jolie were awarded an undisclosed amount in damages from News of the World – the paper claimed the pair has separated – they opted to have the funds absorbed by their Jolie-Pitt foundation.
What next? In her statement of claim Fraser-Kirk only mentioned payments to charity in the punitive damages aspect of her claim. There was no mention of charity in the other details of the claim relating to breach of contract and other issues – on this basis if no punitive damages are awarded charities may miss out entirely.
Meanwhile, David Jones chairman Robert Savage has already given a sign that the retailer was open to negotiations with Fraser-Kirk.
Moreover, McInnes, who admitted to acting in "a manner unbecoming” when he resigned as David Jones CEO in June, said on Wednesday that he planned to return home from overseas to "vigorously contest” some of the Fraser-Kirk’s allegations.
But until Ms Kirk clarifies her intentions – and she is currently not talking to the media – confusion will reign on just which charity might ultimately reap rewards from this unfortunate series of incidents.