The Small Business Ombudsman has launched an inquiry into access to justice for small businesses, explaining the current legal system puts them in “no man’s land”.
According to Kate Carnell, small business operators are 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,” she 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 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.”
The Ombudsman said the Federal Government’s new one-stop shop to deal with banking disputes, the Australian Financial Complaints Authority (AFCA) was a ‘positive step’ but the industry-funded scheme won’t be able 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, identifying patterns and trends;
- 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.”
“I’m particularly interested to learn more about overseas experiences. If there are practical models elsewhere that work we’d like to evaluate them for potential application in Australia.”
The Ombudsman indicated a discussion paper summarising the research and proposing policy options would be released for public comment by the middle of 2018.