Inquiry into access to justice for small businesses launched

Elizabeth Barry 4 December 2017

small business

The Small Business Ombudsman says SMEs are at the wrong end of a power imbalance.

The Australian Small Business and Family Enterprise Ombudsman (ABSFEO) Kate Carnell has launched an inquiry into how small businesses access justice. The inquiry will examine disputes involving small- to medium-sized enterprises (SMEs) in Australia, including actions taken by SMEs when faced with a dispute and the reasons for the decisions made during dispute resolution.

A discussion paper will be released by mid-2018 to summarise the findings and propose policy options.

Carnell says small business operators are "at the wrong end of a power imbalance" when they have to deal with big business and government. This has been evidenced by issues such as long payment times to small businesses, which Carnell has long been fighting to change.

In terms of dispute resolutions, Carnell says consumer protections don't always apply to small businesses.

“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," she explains.

“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 Federal Government's Australian Financial Complaints Authority (AFCA), a one-stop shop set up to deal with banking disputes, was a positive step according to Carnell, but she says it is an industry-funded scheme and 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 inquiry will involve discussions with academics, legal experts and mediation services as well as surveys with small businesses and business operators. Public comment will be invited on the paper following its release in mid-2018.

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