The Brisbane legal market is set to have some busy months ahead as the full effects of the floods which have hit Queensland come to the fore. “I don’t want to underestimate the enormity of what has occurred, but the re-building stage will create a good deal of work. I think we will have to be very ready to assist clients and help them as they look to get back on track,” said Clayton Utz Brisbane managing partner Michael Klug.
Work associated with the re-building of the state’s damaged infrastructure is high on the list for many firms as they get back into their offices. “I expect we will see quite a lot of the old infrastructure in the state replaced with better infrastructure and the Federal Government placing a lot of emphasis on getting it right,” said Klug.
McCullough Robertson managing partner Guy Humble agrees and suspects that as a result of the Premier's recently announced enquiry, there will be some reallocation or prioritisation of funds for infrastructure, but no postponements. Humble also predicts an increase in the amount of M&A work in the region: “As a result of infrastructure damage in regional Queensland, some leveraged assets may become stressed and therefore targets for merger or acquisition,” he said.
Partner in charge of Corrs Chamber Westgarth’s Brisbane office, Eddie Scuderi, also agrees that work associated with infrastructure, the construction of infrastructure and the funding of infrastructure will be plentiful. “The rail network across Queensland in particular will need to be re-built,” he said. “There may also be an increase in PPP activity as a means of funding the projects.”
Scuderi also sees the formation of a two-speed economy within Queensland where mining companies and companies associated with construction move ahead while smaller businesses struggle to recover from the impact of the floods. “I expect there will be more litigation related to companies becoming insolvent - unless they can receive adequate support from banks, I think many of the smaller businesses will suffer as will the farming sector,” he said. Corrs deals regularly with the sugarcane farmers of Queensland and Scuderi said the industry has been severely affected. In fact, it is likely the agricultural industry across the whole state will suffer for some time after dealing with the impacts of drought for the past 10 years. “We have a fairly significant exposure to the agricultural sector of the state,” said Peter Kenny, senior partner at the Thynne & Macartney agribusiness group. “Many properties will have been badly affected by the weather,” he said.
However, it seems that the energy and resources sector is unlikely to be affected by the floods with most lawyers stating that the strength and sheer size of the sector is enough to shield it from any long term damage. “I do not envisage any medium to long term impact due to the sophistication and resilience of the sector,” said Humble. “Once production and the ports get back online, I think they will be able to regenerate quite quickly,” added Klug.
Property and insurance practices are also likely to be affected by the floods, with several new property developments along the Brisbane River already being questioned. “Those purchasing new developments will be looking very closely at the area in which the development is,” said Kenny. The Federal Government has already announced it may look at how insurance is sold in Australia with regards to flood cover after it was discovered that many people affected by the floods will not be covered for river related flooding, and this according to Kenny is very relevant to the legal sector. Klug expects following insurance litigation and dispute resolution to be a major source of work in the future, but also says that more importantly, law firms should be prepared for an increased number of pro bono requests.
Brisbane firms respond and recover from flooded CBD 18 January 2010
Brisbane: floods shut down firms, Norton Rose chief stranded January 13 2010