Work needed on resolving conflict

ONE in five small businesses has experienced a dispute of some kind with another business in the past five years, according to a recent national survey of business-to-business dispute resolution.

However, 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,” Small Business Minister Nick 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.

“Many of these services are free or available at a relatively low cost – and the survey shows it’s definitely worthwhile for small businesses to use them.”

The survey was commissioned by the Department of Innovation, Industry, Science and Research to find out what small businesses know about business-to-business dispute mechanisms and the level of any unmet demand for these services.

Its found about 9 per cent of the one-in-five small businesses experiencing disputes classed their dispute as ‘serious’ while only 6.5 per cent took legal or third party action.

Businesses with up to two employees were proportionally more likely to avoid taking action while two-thirds of disputes were about payment.

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 according to the survey.

“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.