C.7.2 Cost estimates
54 Attached to this judgment as Annexure B is a summary of the "GST-inclusive lawyers' [sic] fees". The fees are not of "the lawyers'" engaged in the proceedings, but those of the solicitors and the employees of the firms of solicitors.
55 As can be seen, there are some marginal differences, which, taken as a whole, tend to indicate that the rates charged by Quinn Emanuel are somewhat less expensive than the fees charged by Maurice Blackburn and Phi Finney McDonald. All in all, I am satisfied that each firm is likely to charge a relatively similar amount for the conduct of the case.
56 I cannot pass from this document, however, without pausing to make one comment. I note, for example, that "law clerks" or "paralegals" on a GST-inclusive basis are charging up to $387.09. Newly admitted solicitors are charging at over $530 on a GST-inclusive basis.
57 In Armstrong Scalisi Holdings Pty Ltd v Piscopo (Trustee), in the matter of Collins [2017] FCA 423, Rares J was faced with $17,000 being estimated for preparation by the solicitors for a two day hearing, while the costs of counsel's preparation was only $6,400. Further, the attendance of all four solicitors for varying times at the hearing was estimated at a cost of nearly $21,000, when counsel, who was to present the case, would be charging a mere $6,400. His Honour noted (at [20]-[28]):
In my opinion, first, this division of work and costs does not comply with the requirements of Part VB of the [Act] and the overarching purpose of the civil practice and procedure rules. Secondly, it reflected, on its face, an inefficient and inappropriate way of dealing with the preparation for, and conduct of the hearing of, a case …
…
One of the significant concerns in our society is the cost of access to justice. It is not surprising that individuals and small businesses would find it difficult to obtain access to justice where four lawyers at a solicitor's firm were each charging different, but substantial, amounts for doing what must involve repetitive work of looking at one another's drafts, documents or other communications, all of which, ultimately, would be, and were intended to be (and properly should have been), drafted and settled by counsel. There is no obvious reason why, having regard to solicitors' fiduciary duties to their clients to ensure that their cases are prepared as efficiently, but as economically and reasonably, as possible, this kind of charging practice is appropriate.
I am not intending to direct criticism in these reasons towards the particular solicitor. … That is because I am not suggesting that this is an isolated situation. To the contrary, it appears to have become a more general model for solicitors to do work that the purpose of having a separate bar was originally intended to ensure be done by the specialised and most cost-efficient advocate, namely counsel. All too often, in looking at security for costs applications, the amounts estimated to be incurred by solicitors in preparing cases, as opposed to the amounts estimated to be incurred by counsel, involve a skewing of work towards the solicitors' efforts that does not seem to be efficient or appropriate in the preparation or presentation of the particular case. Where counsel has to make the forensic decisions as to how the material facts should be pleaded, what pleadings are maintainable, what evidence is to be led and what submissions should be drafted, it is of vital importance that counsel undertake the burden of doing that work themselves and not have it duplicated unnecessarily by the involvement in preparing drafts of one, let alone multiple, solicitors.
Moreover, if solicitors do the significant amounts of drafting work involved in the estimates, it becomes much more difficult for counsel to delete or jettison that material, if counsel decides that some, or often much, of it is irrelevant or unnecessary. After all, by then the solicitor's client has been charged for what is very often forensically useless and would never have been included in the drafting process, had that process been in the control of the advocate from the beginning, as used to be the position.
Indeed, the experience of judges in the hearing of cases, including frequently in appeals, is that counsel often departs significantly from the written submissions that have been ordered to be filed, when he or she informs the Court about the different way in which he or she is going to present the case. At the conclusion of counsel's address, he or she then relies, in almost a throwaway line, on everything in the written submissions, without developing them.
This is not the way that litigation can, or should, be conducted, having regard to the solicitors' and counsel's fiduciary duties to their client, their obligations to the Court and their client under Pt VB of the Federal Court Act and their ethical obligations otherwise arising from their being officers of the Court.
Litigation should be conducted as quickly, inexpensively and as efficiently as possible. That is because the allocation of what is substantively the work necessary to draft pleadings, and present evidence and argument in proceedings is essentially that of the advocate who appears at the trial or other hearing. However, that is not how larger law firms tend to approach modern litigation, as is exemplified in the estimates for this case This approach appears to be treated by the profession as being one that somehow is justifiable.
In my opinion, it is time that the profession recognised that costs should be kept to a minimum. Having five lawyers looking at, for example, the drafting of a pleading or submissions is a matter that, in a case such as this, bespeaks a failure to address a client's best interests and the overarching purpose in Pt VB of the Federal Court Act in minimising costs, and involves a degree of waste and unnecessary duplication of effort that I cannot comprehend.
(Emphasis added).
58 Although Rares J's comments were made in the context of an appeal, the point his Honour was making has a much broader significance, particularly in open class representative proceedings when the costs are not just being incurred pursuant to a contract between solicitor and client to advance the client's own interests.
59 In Dyczynski v Gibson [2020] FCAFC 120; (2020) 381 ALR 1 (at 86-7 [378]-[379]), I explained that solicitors acting for representative applicants have important responsibilities. The role is not only defined by a retainer, but also by duties which reflect the representative nature of the role assumed by the lead applicant. Sometimes solicitors are only engaged contractually by a lead applicant. At other times, they are also retained directly by some or all group members. Where a solicitor is retained by a group member, then the duties owed to the group member client will, of course, be regulated in both contract and tort, and will also take on a fiduciary character informed by the contract. In the absence of a retainer with group members in an open class proceeding, then the duties of the solicitor acting for a representative applicant are, obviously enough, to perform the role consistently with the duty not to act contrary to the interests of those in respect of whom the lead applicant acts in a representative capacity, that is, not to take steps contrary to the interests of the group members.
60 For those in a position of responsibility in firms of solicitors, thought must always be given in individual cases as to whether or not it is consistent with the duties of the solicitors and their professional obligations to keep certain work "in house". That is, when assessing a particular task, it seems to me consistent with a partner's professional obligations to consider whether they are engaging employees to perform work at a higher rate than independent consultants who may be more experienced and yet would be less expensive.
61 The class action is different from other forms of litigation where costs payable as between solicitor and client have historically been taxed or assessed against the obvious background that those paying the costs have made a bargain with the professional and, usually, have accepted contractual rates for the work. Speaking very generally, as someone who has seen many reports of cost consultants opining on the reasonableness of fees, there has been no or little examination as to whether tasks could have been completed less expensively if done by junior barristers rather than employees. Perhaps because of the legacy of reasonableness assessments historically occurring in the context of a contractual relationship, the reports rather tend to focus on whether the rates charged by the employees are at a market rate relative to solicitors of a comparable experience. When it comes to assessments of reasonableness of costs in class actions, it seems to me the Court should be giving consideration as to whether work has been allocated between lawyers (be they solicitors or barristers) in an optimal way in the interests of group members.
62 In any event, the legal charge out rates and the likely budgets are not of any great difference as between the three firms involved. Additionally, I stress the comments I have made about this issue of work allocation generally are not directed to any specific criticism of these firms or because I think there is any particular danger that any of the firms will conduct this litigation without being conscious of their obligations. Having made these general comments, in the circumstances of this case, the rates are very roughly the same and this consideration is, again, relatively neutral.