Legal

Labor promises to back small business in financial disputes with legal advice if elected

- May 1, 2019 < 1 MIN READ

The Labor party has committed to establishing a free legal advice service for small businesses and farmers to assist them with legal disputes with financial service providers.

The announcement has been welcomed by the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), Kate Carnell, who said Labor’s commitment to establishing a free legal advice service would allow farmers and small business owners to act as soon as a dispute raised.

“This service would continue to provide legal advice if the dispute is escalated to the Australian Financial Complaints Authority (AFCA) or is taken to court,” Carnell said.

“Small businesses and farmers would also be able to call on this advice to prepare for past cases to be considered by AFCA under its extended remit – to consider eligible financial complaints from small businesses dating back to 1 January 2008.”

The ombudsman said she supported any measures that ensure small businesses have access to justice, particularly in cases where there’s an imbalance of bargaining power.


“The court system is expensive and is extremely time-consuming; money and time are two key things that small business owners don’t have.

Carnell pointed to the ASBFEO’s research in their Access to Justice Inquiry which suggested business owners were time poor and struggled to wear the cost of any legal disputes.

“[We found] three out of five small business owners sought legal advice from a lawyer. Even with legal advice, small businesses find the cost of any action to achieve justice outweighs the potential gain.

“The proposed initiative would have the ability to actually fund cases, which is a real step to achieving justice for small businesses and farmers with valid cases against their financial service providers.”


 

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