The $130,000 fight: Small business disputes take their toll

Small businesses are spending $130,000 on average to resolve disputes but half of them don’t believe it is worth the time and effort to assert their rights.
Ombudsman Kate Carnell’s report into small business access to justice, released on Wednesday, found smaller operators are most likely to get into fights with other companies over issues such as getting paid. In two thirds of cases the arguments result in a break down of the business relationship.The average cost of fighting a case through formal channels is about $130,000. Ms Carnell said this was double the cost of 10 years ago, according to stories heard from business owners as part of the review.
“Say you’ve got someone who owes you $100,000. That’s a lot of money, but the moment you go anywhere near a court system, you can eat that up really quickly. There is no guarantee how long it will take,” Ms Carnell said.n one case she recently witnessed, a business owner tried to chase $350,000 owed to them but had to face 11 days in court and exorbitant legal costs to secure payment.
The company is likely to go bankrupt after the lengthy proceedings, Ms Carnell believes. Read more

Emma Koehn – Brisbane Times – 5 December 2018