Bennett and Philp lawyer Mark O’Connor said companies may rethink traditional boozy staff office parties out of fear of potential sexual harassment cases.
The warning has sparked outrage from a women’s group.
Last week David Jones publicist Kristy Fraser-Kirk received an $850,000 settlement after suing the retailer, directors and a former CEO in the high-profile case.
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"Sexual harassment in the workplace is inexcusable, but the unspoken fear now is that opportunistic claims may be made, by young staff egged on by a precedent-setting payout beyond their wildest dreams," Mr O’Connor said.
"This young woman has achieved an $850,000 payout which inevitably may encourage others to pursue compensation claims, whether those claims have merit or not.
"The office Christmas party is likely to be the first casualty as firms get tougher on staff and management fraternisation."
Ms Fraser-Kirk sued the company, nine directors and former chief executive Mark McInnes for $37 million – Australia’s largest sexual harassment case.
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She claimed Mr McInnes made unwelcome sexual advances to her and claimed the retailer tolerated his continuing sexual misconduct.
Mr O’Connor told AAP a lot of businesses would consider changing their Christmas celebrations this year in light of the case.
"Rather than having a long boozy Christmas party, they’re having a structured dinner where you sit round a table and it begins at 7 and is all over by 10pm," he said.
"If everyone behaved themselves, there would be no need for it, but the sad fact is that when you have that combination of Christmas cheer, maybe more drinks than normal … things can happen that in the cold light of day you would regret."
He said employers would no doubt take a cautious approach to festivities and introduce stricter controls to prevent situations getting out of hand.
"I guess (for) large organisations with a large number of people attending functions, it wouldn’t be such a bad idea for some (sexual harassment) training or at least for people to be made aware of the issues," he said.
Mr O’Connor said he did not expect a flood of copycat cases.
Women’s Electoral Lobby spokeswoman Eva Cox told AAP that warnings like this were "utter stupidity".
"He’s assuming that men can’t keep their hands to themselves," she said.
"People don’t make (harassment) claims easily, there’s a lot of embarrassment and discomfort in making claims."
Ms Cox said the comments were disrespectful to victims of sexual harassment and women in general.
"It indicates a really deep sexism," she said.
She said targeting Christmas parties was short-sighted.
"(Companies) need to make sure they have clear guidelines that say you don’t use your power to make people do things they don’t want to do," she said.
"That’s what harassment is about, it’s not about have silly sessions at Christmas parties."