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Photo of Small Business Commissioner David Eaton

Justice should not be just for big business

Small business deserves and needs equal access to justice.

A renewed federal focus on unfair business contracts has offered some hope of levelling the playing field when it comes to disputes with large suppliers or head contractors. However much remains to be done to ensure small businesses are empowered to stand up for themselves in a commercial dispute.

A survey of 1,600 small businesses from across the country by the Australian Small Business and Family Enterprise Ombudsman found one in five had experienced a dispute with another business in the last five years, with 87 per cent saying they had experienced a financial loss as a result.

The Federal Government enacted unfair contract term laws in 2016 to redress some of the imbalance between big and small business in contractual disputes.

While more needs to be done, there is hope. With an increased focus on the topic during the federal election campaign earlier this year, there is cause for optimism that further changes are around the corner.

The main issue is that unfair terms in standard form contracts are not currently illegal (‘standard form’ is a pre-prepared contract where most of the terms are set-out in advance with little or no negotiation between the parties). Both the major parties are committed to toughening the laws and extending the number of businesses and types of contracts to which they apply. Once amendments are introduced to Parliament, passage of the revised laws would appear assured.

Too often, large companies extend court proceedings until small operators give up or go broke. Concluding cases more quickly and avoiding the courts, reducing red tape and introducing penalties for unfair contract practices would be a great starting point.

If you’re a small business operator in dispute with another business or government agency, our dispute resolution team can provide advice and help facilitate discussions with the other party. This service is free and most disputes are resolved quickly at this stage. Those that aren’t can be referred to our low cost, independent mediation process. Our services offer a very cost-effective alternative to pursuing matters through the courts.

Small businesses are still advised to retain the services of a lawyer. Good legal advice can help protect your business interests and to comply with legal obligations. Before threatening any type of legal action, get advice from a lawyer and consider all your options first.

If you would like assistance on any of these topics, call us on 133 140 to speak to one of our experienced business advisers or read these useful resources:

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