Inquiry on accessibility of justice for small business launched

The Australian Small Business and Family Enterprise Ombudsman has launched an inquiry into access to justice for small business.

Ombudsman Kate Carnell said small businesses may be at the wrong end of a power imbalance in dealings with big business and governments.

“Consumer protections don’t always apply to small businesses, who have limited options in seeking resolution,” Carnell explained. “There are mediation services provided by my office and state Small Business Commissions, but if the dispute can’t be mediated it starts to get expensive. The current legal system puts small business in no-man’s land.”

Carnell pointed out that the court system is expensive and takes a lot of time.

“If there are two things that small business operators don’t have it’s time and money,” she said.

While she lauded the Federal Government’s establishment of the Australian Financial Complaints Authority (AFCA), the one-stop shop to deal with banking disputes, she also said that theAFCA is an industry-funded scheme and is powerless to deal with non-financial matters. “That’s why I’m launching an inquiry into how we can improve access to justice for small business in disputes with big business and governments,” she said.

The first phase of the inquiry will examine the nature and incidence of small business disputes in Australia, the level of awareness of options available to small businesses, particularly alternative dispute resolution, actions taken by small businesses when faced with a dispute, reasons for decisions made throughout the dispute resolution process, and developments and trends in similar jurisdictions overseas.

“Our starting point is to research the current situation by talking with academics, legal experts and mediation services,” Carnell said. “Early next year we’ll survey small businesses and any business operator who’s interested will be able to participate.”

A discussion paper would be released by the middle of 2018 to summarise the research and propose policy options.

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