Photo © 2010 AAP Image/Tracey Nearmy

As the infamous sexual harassment lawsuit against David Jones began court proceedings this week, it has been revealed that DJs could have avoided the $37 million lawsuit.

According to The Sydney Morning Herald, David Jones and its former chief executive, Mark McInnes, could have dodged the multi-million-dollar suit, had they accepted Kristy Fraser-Kirk’s initial settlement demands.

A week before she lodged the claim, David Jones and Mr McInnes had been busy negotiating a settlement with her lawyers. But talks broke down after DJs rejected her demand for $850,000 in damages.

The opening claim from Kristy Fraser-Kirk’s side was for damages of $8 million; DJs opened at $250,000. Ms Fraser-Kirk’s lawyers reduced their demands to $3.5 million, then $1.5 million, while the retailer improved its offer to $380,000, then $500,000. Ms Fraser-Kirk cut her demand to $850,000.

But after a weekend to consider the offer, Ms Fraser-Kirk’s lawyers decided to pursue a punitive claim of $37 million and David Jones agreed to settle for $850,000 (but insisted on a standard deed of release that included confidentiality and no further action). Swiftly, Ms Fraser-Kirk's lawyers filed the $37 million lawsuit.

Earlier this week, a lawyer for Ms Fraser-Kirk told the Federal Court in Sydney that the claim may be amended to include 11 more women who were allegedly subjected to sexual harassment.