TRANSCRIPT
Australian Small Business and Family Enterprise Ombudsman Bruce Billson interview with Leon Delaney.
2CC Radio Canberra
Subject: Creating a Small Business and Codes List for the Federal Circuit Court
Leon Delaney
Well, thanks for joining us. You've been writing today about the importance of legal protections for small business and the unfortunate situation where small businesses that have effectively been dudded by big businesses have very limited options in trying to set things right.
Bruce Billson
Yeah, it's a concern. Just as the dark clouds roll in over the capital, Leon, sometimes those dark clouds for a small business can be another business treating them appallingly and in some respects in breach of the law. Now, the law might be competition and consumer law. There might be false and misleading representations that lulled them into doing something they otherwise wouldn't. Maybe unfair contract terms, another area where small businesses gain protections as if they were consumers. Or it might be an industry code like in franchising where there's certain bumper rails around what's reasonable commercial conduct.
If they're harmed by behaviour outside those rules of the road, it's too expensive for a small business to pursue that matter on their own behalf because they head off to the Federal Court of Australia. And that's a couple of hundred thousand dollars and a couple of years wait and that's why so much pressure then gets put onto our regulators to pick up those case matters and actually provide the protection that the small business is looking for and that these laws promise, but often doesn't materialise because of the barriers in implementing action in support of those laws.
Leon Delaney
Now, you've explained in your article today that the reason these matters go to the Federal Court of Australia is because that's how it's designed in the Constitution. And because of that there's no federal equivalent of what many states and territories have, a small claims tribunal where some of these matters might have otherwise been determined. But you've come up with a kind of solution, a way to create an equivalent to a small claims tribunal, but it's within the Federal Court.
Bruce Billson
That's right, Leon, because Chapter III of our Constitution says if there's any decision to be enforced on parties to a matter before a judgment body, it has to be before a court, or it could be a tribunal if the parties agree. And that's how you see things like the Administrative Appeals Tribunal have a role. People, when they're applying for certain things, they agree to be bound by it. That's okay.
But in a commercial dispute, how do you get the parties to agree to that kind of process? More often than not, the bigger, well-resourced party will think, hang on, let's go off to the Federal Court. We've got more money. We'll starve out the small business. They won't be able to stay in the case and we'll end up winning.
So, what we've said is, let's find a right-sized jurisdiction. A process where these smaller value matters up to, say, $1,000,000, which, you know, is everything to a small business, but in the scheme of a major corporate matter, probably not much in their eyes.
Send the really big price tag, really big penalty matters off to the Federal Court. But have these more immediate small business matters dealt with by the Federal Family and Circuit Court by creating a Small Business and Codes List that they can oversee. And cap the judgments or the penalties at $1,000,000, get matters heard quickly and get business back to business.
Leon Delaney
So, in other words, create a branch of the Federal Court that operates much like a small claims tribunal.
Bruce Billson
Spot on. That's right. We'd say, look, bring your matters, carry your own costs. One of the big issues about the Federal Court is if you and I took an action against a big party, they often introduce us to their legal team because under the Federal Court, in many cases, we get to pay their costs if we lose.
Now, that's one of the things that's very intimidating, that makes that access to justice out of reach and inaccessible to the average small or family business. What we're talking about is very responsive, let's use alternative dispute resolution first, let’s see what can be agreed long before we trouble His or Her Honour as the judge. But actually get to a point quicker, pay your own costs and have court rules that allow the court to appoint a technical expert on a matter of some technical disagreement rather than have lawyers walk in with trolleys of information where one expert is, you know, duelling with the other expert and burns up costs, time and resources and doesn't get you anywhere near an early resolution.
Leon Delaney
Okay. So, where's the ACCC and where’s the ASIC in all of this? Aren't they meant to be enforcing the rules?
Bruce Billson
They're really important players, Leon. But like this agency, they are funded by the taxpayer. So, when they decide which matters to pick up, to litigate, to investigate, they have to work out how to ration the money that's been available to them for that kind of enforcement.
And guess what? It's no big surprise. They’ll choose the big bang matters. They'll choose the cases that have a material impact on the economy, might be what’s called a systemic failure where problems have occurred over and over again. Or it might have considerable public interest.
If you and I, as prospective franchisees, put $600,000 down as a deposit on a franchise unit and then we decide quite reasonably under the cooling off arrangements we don’t want to proceed, we want to get our money back. What happens if we don’t get our money back? At the moment, we hope and pray the regulators will pick up that matter, but it's highly unlikely that they will. We need to be able to defend our own economic interests and have a jurisdiction, a court process, that lends itself to us directly engaging.
Leon Delaney
And in fact, the best line in the entire article refers to the inadequacy of those regulators for those reasons. And it says this: So, the law looks like it's a hunting dog that won't leave the porch. I love that.
Bruce Billson
I use that phrase to try and make the point that laws and regulations are passed by parliaments. These codes are put in place, and they promise much to the small and family businesses that rely upon them.
And I think the regulators and law makers hope the simple existence of those laws will mean people will be less inclined to infringe upon them. Well, that may have some merit, but the reality is when things go wrong and the law needs to be enforced, too often those regulators aren't there for them. The court system through the Federal Court is not a reasonable option, and we are proposing a really constructive solution to that to get matters resolved and get business back to business.
Leon Delaney
Okay. So, have you put this idea to the federal Minister for Small Business, Julie Collins?
Bruce Billson
It's one of a number we've put in, not just to Minister Collins. You've known me long enough, Leon, to know it wouldn't just be one or two people I'm sharing this idea with. We've been pushing this out to any and all people that are interested, including ministers, including parliamentary inquiries and including in the in the court of public opinion being through channels like the op-ed that you're referring to at the commencement of this interview.
We're really working closely with collaborators to make sure the model is sound. It meets a range of expectations, including, for instance IP Australia, Intellectual Property Australia. What happens if someone's got an idea, you claim it's yours, well it’s really hard to get that heard quickly. Here’s another opportunity this Federal Circuit Court List could present to make that process more accessible and, frankly, function as it was intended.
Leon Delaney
If you’ve been putting out the feelers already, has there been any kind of interest expressed from the Federal Government?
Bruce Billson
We’ve had some encouragement to work up the idea and that’s what we’re doing. I’ve been working with some people in the judiciary, working with the legal fraternity, working with industry associations to map out the scope of this idea. One of the challenges I have Leon is to prove the need for it and that’s a challenge because we’re talking about people who would have defended their economic interest had this mechanism been there. The fact that it’s not there, how do you find those people?
So, we’re looking at surveying the small business community, having a look at our own case load where our alternative dispute resolution hasn’t been able to get an outcome and asking those people if you had this avenue available to you would you have utilised it. Thats part of the work we’re doing.
Leon Delaney
So, on that basis if there are any small business operators listening at the moment and they’ve got a story to tell, they should get in contact with your office.
Bruce Billson
Absolutely. Jump on our website asbfeo.gov.au
We love that field evidence and that input. It helps bring together the evidence we need to make this public policy case.
Leon Delaney
Bruce, thanks very much for your time today.