Most small businesses are in the dark when it comes to options for dispute resolution, according to a recent survey commissioned by the Department of Innovation, Industry, Science and Research (DIISR)
In releasing the survey findings yesterday (18 November), the Minister for Small Business, Senator Nick Sherry, said around one in five small businesses have experienced a dispute of some kind with another business in the past five years, but only a third of these small businesses believed their dispute was serious enough to warrant further action by a third party.
"What comes through strongly from the survey is that many small businesses don't know about low-cost options available to them for dispute resolution," Senator Sherry said.
"In the case of small businesses, a dispute may drain significant resources and have an impact on everyday operations. They may miss out on having their matters settled to their satisfaction simply because they don't know how to access alternative methods of dispute resolution."
The survey was commissioned by DIISR with the aim of discovering what small businesses know about business-to-business dispute mechanisms and the level of any unmet demand for these services.
The survey also revealed that only around 9 per cent of small businesses classed their dispute as serious; only 6.5 per cent took legal or third party action; businesses with zero to two employees were proportionally more likely to avoid taking action; two-thirds of disputes were about payment; and small businesses that use alternative avenues of dispute resolution, such as arbitration, mediation or conciliation, are more satisfied than those that go to court or seek legal advice.
"The key message from this study is that despite the wide range of mechanisms available, including low cost and free services, many small businesses simply are not aware of these services and this may be a place where all levels of government could play a role," Senator Sherry said.