New legislation to provide  a fair-go for small businesses in dispute

- February 15, 2019 2 MIN READ

An amendment to the Treasury Laws passed by the Senate yesterday will allow small business better access to justice should they be in dispute with big business or government.

The Treasury Laws Amendment (2018 Measures No. 5) Bill 2018 will allow a small business to request a ‘no adverse costs order’ early in the court case and if the judge decided the case was in the public interest, the small business wouldn’t have to pay the other side’s cost if they lost.

The Bill was championed in the Senate by Shadow Treasurer Andrew Leigh. It is  hoped the changes will level the playing field should a small business go up against the big end of town.

The Australian Small Business and Family Enterprise Ombudsman, IASBFEO)  Kate Carnell says the amended Bill, will allow small businesses better access to justice and supports the findings of ASBFEO’s recent inquiry Access To Justice: Where do Small Businesses Go?

“At the moment, if a small business owner takes big business or the government to court, they have to cover their own costs and take the risk of paying the other side’s cost if they lose or withdraw from the case,” says Carnell.

“Access to justice is regularly raised as an issue with us by small businesses, particularly how expensive and time-consuming the court system can be. Small businesses don’t have that kind of money and time.

“Phase 1 of the inquiry, showed the average cost of a dispute through formal channels was over $130,000. I don’t know many small businesses that have that kind of money lying around in their bank account.

“The Phase 1 report also showed one in three disputes were not escalated through a formal process because the expected costs were considered to be more than the potential gain.

“This amendment would be an important step towards levelling the playing field and would help address the power imbalance that currently exists.” Carnell concluded.


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