Roger Quick is an accredited Costs Assessor and the lead author of Quick on Costs. Since moving to Australia in the early 1980's, he has been a partner at some of Queensland's largest law firms, and is widely considered one of the state's foremost experts on costs law.

Earlier this year, Roger and his fellow authors, embarked on a major revision and relaunch project for Quick on Costs. The project consists of the publication of all new chapters, in what is the most significant review of the service since it was first issued in 1997. Most recently, the first new chapter, The language of costs, was published in December and issued with a new binder, which will soon house among others, the new Ethics and Introduction chapters due in early 2013.

As well as working on the rewrite project, the Quick on Costs team recently authored the Year in Review 2012, also issued in the December update and now available online. Here, Roger talks to us about some of the new trends that have impacted the costs landscape this year, and gives us an insight into the industry’s outlook for 2013:

The field of legal costs has undergone some massive changes in Australia over the last few years. What were some of the most significant events to have shaken up costs in 2012?

The courts have provided some positive decisions this year. Costs problems are often problems of statute or contract law, or a mixture of both, and it is this fact that makes High Court decisions such as PGA v The Queen [2012] HCA 21 and Barclay v Penbethy [2012] HCA 40, which look at the interrelationship of the common-law and statute, so significant.

The two instalments of Superior IP International Pty Ltd v Ahearn Fox Patent and Trade Mark Attorneys [2012] FCA 282 are a very significant indication of judicial willingness to enforce the "genuine steps" statements and equivalents in the Civil Dispute Resolution Act 2011.

Branson v Tucker [2012] NSWCA 310 highlights some of the limits to a barrister's right to sue for fees under a costs agreement. In Challen v Golder Associates Pty Ltd [2012] QCA 307 the Queensland Court of Appeal gave some welcome guidance on the requirements of the Model Law provisions as to interim and final bills and the judicial approach to assessment.

In contrast to the courts, the performance of government has been much less positive.

Since 2009 the Federal Government and regulators have been working on support for the National Law Reform which formally collapsed in 2012 following the election of the Newman Government in Queensland. New South Wales and Victoria are intent on pulling planks from the wreckage and enacting uniform regulatory legislation, but if they do not manage this we are in for a period of continued regulatory uncertainty.

A similar uncertainty may affect another important area of costs - the emerging market in litigation funding. This comes  as a result of the Federal Government’s decision to exempt litigation funders from full regulation under the Corporations Act 2001. It remains to be seen if this increases growth and competition in the provision of legal services and access to the courts.

International law firms have become more prominent in Australia. What effect might this have on costs in the local market?

In 2000, UK or US firms had little or no interest in acquisitions of, or mergers with the new national mega-firms that dominated the Australian legal services market. Fast forward to 2010 and an enviable growth in revenue in these national mega-firms had excited the interest of the international firms. If we jump again to the end of 2012, we see us with all the leading Australian firms, save for four "independent" national firms, in "integral alliances" or, much more rarely, a "full financial merger" with an international firm from the UK, US or China.

Five forces are usually thought of as shaping an industry’s competitiveness. We now have three of them operating on a new Australian legal market – new entrants, the threat of substitute services and the bargaining power of buyers – and they seem certain to intensify.

Possible effects of this combination on the Australian market clearly include:

• increased competition and an industry "shake-out"; and
• the increasing use of procurement-based approaches by the buyers of commercial legal services driving diminishing returns.

These things seem equally clear to point to possibilities including:

• the need for increasing care in the documentation and management of retainers;
• an acceleration of the need to understand and implement fee arrangements other than the billable hour; and
• a need to keep a close watch on the progress and use of disruptive technologies such as legal processing outsourcing.

The Federal Government has undertaken a review of its access to justice ‘genuine steps’ regime that will conclude in August 2013. What are the findings likely to be, and what impact might this have on costs?

It is easier to say what the Federal Government would like the findings of its review to be, than what they are likely to be. In commenting on the review the Attorney General, Nicola Roxon has said:

Alternative Dispute Resolution plays an important role in helping to alleviate pressure on our courts, and ensure that more Australians can access the justice system – a key priority for a Labor Government.

Whilst many and varied options to heading into court have been available for some time, Australia is yet to develop a true culture of Alternative Dispute Resolution. It is essential to foster a meaningful dispute resolution culture within the legal fraternity and, indeed, within the wider Australian community by means including court fee reform and making sure that lawyers give clients information about the options that are available to them beyond the court.

One of the reasons that the legislation encouraging people to take "genuine steps’ to attempt to resolve a dispute in certain federal matters before going to court was introduced was to promotes a change from the adversarial culture of dispute management. It was “a legislative kick-start, if you like, to foster an alternative dispute resolution culture.”

For the Attorney General's full speech to the NSW Bar Association about Alternative Dispute Resolution, from 4 August 2012, click here.

Some of the forthcoming new chapters of Quick on Costs deal with areas that aren’t currently covered in the service, such as "ethics in legal costs". What made you feel that now was the right time to introduce this topic?

We felt it was important now to address ethics in the service because "ethics" are becoming increasingly important to practitioners. The role of ethics in complaints about costs has been understood for some time but ethics increasingly manifest themselves in many requirements of contemporary practice like the "genuine steps" regime. The meaning and scope of "ethics" are being made clearer and easier to explain by a legislative framework document like the Australian Solicitor’s Conduct Rules of 2012.

For further commentary on costs law matters, see Quick on Costs.