Small retailers dodging legal battles by turning to mediation

Victorian small retailers are avoiding costly legal action by increasing their use of official mediation channels, a new report has revealed.

The annual report of the Office of the Victorian Small Business Commissioner states that mediation for small retailers in the past financial year had a 77% success rate.

A total of 1,380 cases were put forward for mediation, up 1% on the previous year. More than a third of these disputes were settled before mediation.

The main areas of dispute are contracts and leasing, with the commissioner’s office receiving a record 343 complaints under the Small Business Commissioner Act.

The commissioner’s office also reported widespread success in defusing franchising disputes, with a resolution rate “consistently around 80%”.

Despite the rise in cases put forward by mediation, the number of small retailers seeking preliminary assistance via the telephone dropped in the last financial year.

A total of 6,931 calls were made to the commissioner’s dispute resolution service, down from 7,581.

However, the encouraging uptake in mediation cases is set to save small firms millions of dollars in legal fees, according to the acting commissioner Peter Lisle.

The report also stats that the small business commissioner received $2.4 million in funding in the last financial year. The NSW opposition has promised, if elected, to introduce a similar position in the state to champion the cause of small businesses.