Interactions and consequences of inertia and switching costs

Purpose: Service research typically relates switching costs to customer loyalty, and portrays them as effective switching deterrents that engender harmful word-of-mouth (WOM). Rather than to customer loyalty, this paper aims to relate switching costs to consumer inertia, and show that while switching costs may result in customer retention, they can engender positive and negative WOM. This depends on whether the inertia stems from satisfaction or indifference. Design/methodology/approach: A mall-intercept survey investigated 518 customers' perceptions of their mobile phone service providers. Structural equation modelling fitted the data to the conceptual model. Findings: Switching costs deterred switching and engendered negative WOM, but only with low-inertia customers. With high-inertia customers, retention and WOM behaviours depended on whether the inertia stemmed from satisfaction or indifference. Satisfied customers with high switching costs tended to stay, gave more positive and less negative WOM. With indifferent customers, switching costs were unrelated to retention or WOM behaviours. Research limitations/implications: While they may be perceived negatively, switching costs can engender PWOM. Hence, research should not consider switching costs alone without considering the context that produces them. Practical implications: Service providers should segment their customers into low-inertia, high-inertia/satisfied and high-inertia/indifferent, and target each segment differently. By converting customers into the high-inertia/satisfied segment, service providers can make the best use of switching costs – not only in the traditional sense as a barrier to defection, but also as a way of generating positive WOM. Originality/value: This study is the first to consider the role of inertia with switching costs, positive WOM, and negative WOM. The findings suggest that past studies portraying switching costs as negative impediments that evoke only negative WOM might be misleading.

Federal Court Rules O23 r 11 - offers of compromise - offer for dismissal of claim and to forego recovery of costs.

In Uniline Australia Ltd ACN 010752057 v S Briggs Pty Ltd ACN 007415518 (No 2) [2009] FCA 920 Greenwood J considered a number of principles guiding the exercise of discretion in relation to costs, particularly when offers of compromise have been made under the formal process provided by the Federal Court Rules.

Full circle on costs

This article considers the implications of the decision in Paroz v Clifford Gouldson Lawyers [2012] QDC 151, which examined provisions of the Legal Profession Act 2007 (Qld) dealing with costs disclosure and assessment, and also considered associated provisions of the Uniform Civil Procedure Rules 1999 (Qld).

Court overrides costs assessment limits

This article considers the implications for Queensland practitioners of the decision of the New South Wales Court of Appeal in Branson v Tucker [2012] NSWCA 310. That decision involved the question whether the court retained a jurisdiction to examine the reasonableness of costs charged by a barrister, who had entered a costs agreement with solicitors, in circumstances where where had been no application under the Legal Profession Act 2004 (NSW) for an assessment of the costs the subject of the bill and it was no longer possible for such an application to be made.

Uniform Civil Procedure Rules r150 : orders relating to "property" – whether sperm extracted and stored may be characterised as “property”

In Bazley v Wesley Monash IVF Pty Ltd [2010] QSC 118 an order was made under r 250 of the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”) requiring the respondent to continue to hold and maintain straws of semen belonging to the applicant’s deceased husband. The decision includes a useful analysis of the development of the common law regarding property rights in human bodies and body parts.

Legal Profession Act 2004 (NSW) : costs agreement between law practice and client - whether binding on non-associated third party payer

The decision in the New South Wales Supreme Court in Boyce v McIntyre [2008] NSWSC 1218 involved determination of a number of issues relating to an assessment of costs under the Legal Profession Act 2004 (NSW). The issue of broad significance was whether a non-associated third party payer must pay the fixed fee that was agreed between the law practice and the client. The court found that the client agreement did not form the basis of assessing costs for the non-associated third party payer.

Costs - UCPR rr 681 and 684

In BHP Coal Pty Ltd v K Orenstein & Koppel AG (No 2) [2009] QSC 64 McMurdo J considered the circumstances in which the ordinary rule under r 681 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) that costs should follow the event should be departed from in favour of a party who was unsuccessful overall, but who succeeded on particular questions. When the court is satisfied that a departure from the usual order under r 681 of the UCPR is justified, it appears increasingly willing to exercise the power in r 684(2) to declare what percentage of costs was applicable to a particular issue

Supreme Court Act 1995 (Qld) s 253 – whether refusal to stay execution of costs is an order “as to costs only”

In Virgtel Ltd v Zabusky [2009] QCA 92 the Queensland Court of Appeal considered the scope of an order “as to costs only” within the meaning of s 253 of the Supreme Court Act 1995 (Qld) (‘the Act”). The Court also declined to accept submissions from one of the parties after oral hearing, and made some useful comments which serve as a reminder to practitioners of their obligations in that regard.

Estimating health related costs and savings from balcony acoustic design for road traffic noise

A multi-faceted study is conducted with the objective of estimating the potential fiscal savings in annoyance and sleep disturbance related health costs due to providing improved building acoustic design standards. This study uses balcony acoustic treatments in response to road traffic noise as an example. The study area is the State of Queensland in Australia, where regional road traffic noise mapping data is used in conjunction with standard dose–response curves to estimate the population exposure levels. The background and the importance of using the selected road traffic noise indicators are discussed. In order to achieve the objective, correlations between the mapping indicator (LA10 (18 hour)) and the dose response curve indicators (Lden and Lnight) are established via analysis on a large database of road traffic noise measurement data. The existing noise exposure of the study area is used to estimate the fiscal reductions in health related costs through the application of simple estimations of costs per person per year per degree of annoyance or sleep disturbance. The results demonstrate that balcony acoustic treatments may provide a significant benefit towards reducing the health related costs of road traffic noise in a community.

Surgical treatment approaches and reimbursement costs of surgical site infections post hip arthroplasty in Australia : a retrospective analysis

BACKGROUND: The treatment for deep surgical site infection (SSI) following primary total hip arthroplasty (THA) varies internationally and it is at present unclear which treatment approaches are used in Australia. The aim of this study is to identify current treatment approaches in Queensland, Australia, show success rates and quantify the costs of different treatments. METHODS: Data for patients undergoing primary THA and treatment for infection between January 2006 and December 2009 in Queensland hospitals were extracted from routinely used hospital databases. Records were linked with pathology information to confirm positive organisms. Diagnosis and treatment of infection was determined using ICD-10-AM and ACHI codes, respectively. Treatment costs were estimated based on AR-DRG cost accounting codes assigned to each patient hospital episode. RESULTS: A total of n=114 patients with deep surgical site infection were identified. The majority of patients (74%) were first treated with debridement, antibiotics and implant retention (DAIR), which was successful in eradicating the infection in 60.3% of patients with an average cost of $13,187. The remaining first treatments were 1-stage revision, successful in 89.7% with average costs of $27,006, and 2-stage revisions, successful in 92.9% of cases with average costs of $42,772. Multiple treatments following 'failed DAIR' cost on average $29,560, for failed 1-stage revision were $24,357, for failed 2-stage revision were $70,381 and were $23,805 for excision arthroplasty. CONCLUSIONS: As treatment costs in Australia are high primary prevention is important and the economics of competing treatment choices should be carefully considered. These currently vary greatly across international settings.

Lifecycle costs of ultracapacitors in electric vehicle applications

The pulse power characteristics of ultracapacitors appear well suited to electric vehicle applications, where they may supply the peak power more efficiently than the battery, and can prevent excessive over sizing of the battery pack due to peak power demands. Operation of ultracapacitors in battery electric vehicles is examined for possible improvements in system efficiency, vehicle driving range, battery pack lifetime, and potential reductions in system lifecycle cost. The lifecycle operation of these ultracapacitors is simulated using custom-built, dynamic simulation code constructed in Matlab. Despite apparent gains in system efficiency and driving range, the results strongly suggest that the inclusion of ultracapacitors in the electric vehicle does not make sense from a lifecycle cost perspective. Furthermore, a comparison with results from earlier work shows that this outcome is highly dependant upon the efficiency and cost of the battery under consideration. However, it is likely that the lifecycle cost benefits of ultracapacitors in these electric vehicles would be, at most, marginal and do not justify the additional capital costs and system complexity that would be incurred in the vehicle

Simulated lifecycle costs of ultracapacitors in battery electric vehicles

The pulse power characteristics of ultracapacitors appear well suited to electric vehicle applications, where they may supply the peak power more efficiently than the battery, and can prevent excessive over sizing of the battery pack due to peak power demands. Operation of ultracapacitors in battery electric vehicles (BEVs) is examined for possible improvements in system efficiency, vehicle driving range, battery pack lifetime, and potential reductions in system lifecycle cost. The lifecycle operation of these ultracapacitors is simulated using a custom-built, dynamic simulation code constructed in Matlab. Despite apparent gains in system efficiency and driving range, the lifecycle cost benefits as simulated appear to be marginal, and are heavily influenced by the incremental cost of power components. However, additional factors are identified which, in reality, will drive ultracapacitors towards viability in electric vehicle applications.

The health outcomes and costs of people attending an interdisciplinary chronic disease service in regional Australia : protocol for a longitudinal cohort investigation

Background Rates of chronic disease are escalating around the world. To date health service evaluations have focused on interventions for single chronic diseases. However, evaluations of the effectiveness of new intervention strategies that target single chronic diseases as well as multimorbidity are required, particularly in areas outside major metropolitan centres where access to services, such as specialist care, is difficult and where the retention and recruitment of health professionals affects service provision. Methods This study is a longitudinal investigation with a baseline and three follow-up assessments comparing the health and health costs of people with chronic disease before and after intervention at a chronic disease clinic, in regional Australia. The clinic is led by students under the supervision of health professionals. The study will provide preliminary evidence regarding the effectiveness of the intervention, and evaluate the influence of a range of factors on the health outcomes and costs of the patients attending the clinic. Patients will be evaluated at baseline (intake to the service), and at 3-, 6-, and 12-months after intake to the service. Health will be measured using the SF-36 and health costs will be measured using government and medical record sources. The intervention involves students and health professionals from multiple professions working together to treat patients with programs that include education and exercise therapy programs for back pain, and Healthy Lifestyle programs; as well as individual consultations involving single professions. Discussion Understanding the effect of a range of factors on the health state and health costs of people attending an interdisciplinary clinic will inform health service provision for this clinical group and will determine which factors need to be controlled for in future observational studies. Preliminary evidence regarding changes in health and health costs associated with the intervention will be a platform for future clinical trials of intervention effectiveness. The results will be of interest to teams investigating new chronic disease programs particularly for people with multimorbidity, and in areas outside major metropolitan centres.