Small business commissioners hitting 80% success rate in resolving disputes

The majority of disputes referred to Australia’s army of small business commissioners are being resolved successfully, according to Australian Small Business Commissioner Mark Brennan.

Speaking at the COSBOA National Small Business Summit in Melbourne on Thursday, Brennan said across all jurisdictions, the success rate of disputes being solved by the commissioner’s offices has hit 80%.

And while disputes have traditionally been solved through litigation, Brennan says alternative resolution methods such as mediation are gaining in popularity.

Brennan describes dispute resolution as the “flagship function” of the small business commissioners, with Victorian Small Business Commissioner Geoff Browne telling the same audience 75% of the disputes seen by his office relate to retail leases.

But both Brennan and Browne say the cost of resolving disputes for SMEs can be extremely high.

Browne says based on survey data from completed disputes in Victoria in 2012, the average cost to businesses was $7,500 and 63 hours in time. The average time it took to resolve a single dispute was six months.

Browne says more than 70% of the same 300 businesses surveyed said the dispute had an adverse impact on their business’ performance, their personal stress or their health and wellbeing, which highlights the costs of business disputes to SMEs.

Brennan sees the role of his office, and those of his state counterparts, is to “influence behaviour in the business community to improve the quality of the business environment”.

To this end, he believes all stakeholders have a role to play, including big business, which should act in a leadership role, government and policy makers, who should not be “umpires who’ve never played the game”, industry associations, and small business owners themselves, who should be “hungry” for information about how to run their businesses more successfully.

Brennan told SmartCompany it is an area in which Australia is “leading the world” and other countries are becoming increasingly interested in the idea of a small business commissioner whose role it is to help resolve disputes.

But changes are on the way to Brennan’s office, with the federal government announcing in the May budget its intention to “transform” the National Small Business Commissioner into a Small Business and Family Enterprise Ombudsman, and allocated $8 million over four years to that end.

The government has already released a consultation paper about the change and Brennan says he expects a draft exposure bill will be released by the end of this month or in early September.

“We’ll then be able to see what the legislation will look like,” he says.

Brennan says he expects the legislation to “really just be giving legislative support for what we already do”.

“And that will, obviously, be extremely helpful to be able to say, not only do we recommend you do this, but we’ve actually got some power behind us,” he says.

But Brennan doesn’t believe the changes will drastically alter the role of his office.

“The interesting thing in practice will be to what extent do you actually sort of run around waving the act at people because I’ve sort of found people respond better if you’re cooperative and give them a chance to sort of fix things up,” he says.

Nevertheless, Brennan says having the government’s support in the form of legislation will be “very helpful”.

“Legislation is the most concrete expression of a government’s policy, so you are in a position to say ‘the government takes this very seriously’,” he says.

“I think it is an expression of their commitment to that concept of helping small business.”

As for his priorities, Brennan says he wants to reach out to what he calls “the unaffiliated small businesses”—those who are not currently a member of an industry association or chamber of commerce—and help them understand the commissioner’s role in helping to resolve disputes.

“They don’t get professional advice … and yet they put their house up against their business,” he says.