Shadow Assistant Treasurer Andrew Leigh has proposed an amendment to Treasury Laws that would help small businesses see justice in legal disputes with bigger businesses and government.
What is the amendment?
The Treasury Laws Amendment (2018 Measures No. 5) Bill 2018 would 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.
Without this amendment, if a small business takes a bigger entity to court, they run the risk of not only covering their own legal costs but also paying the other side’s costs if they lose or withdraw from the case.
“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,”
Australian Small Business and Family Enterprise Ombudsman, Kate Carnell said.
Phase one findings of the Access to Justice: Where do small businesses go? Inquiry showed the average cost of legal disputes for small businesses was over $130,000, which only a small number of businesses can afford.
The 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.