Phase 1 of the Access to Justice inquiry examined the nature and incidence of disputes, actions taken by small business when faced with a dispute and the factors that influence whether a small business continues to seek resolution of, or abandoned, a dispute. More than 1,600 small businesses across Australia were surveyed.
The research found:
- the average cost to resolve a dispute through formal pathways is over $130,000; double of that a decade ago
- payment times and terms remain the biggest cause of disputes
- time and cost are the most significant factors when determining how far to pursue resolution of a dispute
- 22% of small businesses surveyed were involved in a serious dispute in the last five years
- 62% sought legal advice either from a lawyer or another legal service
- when escalated through a formal process, half of small business owners considered the amount of time and effort required was unreasonable.
This report has informed the next phase of the Access to Justice inquiry – Phase 2 will look at the court systems, explore emerging ideas for streamlining processes and make recommendations to improve access to justice for small business owners.