One of the first questions many people with a legal dispute ask is whether they should commence legal proceedings. This is particularly the case for owners of small to medium businesses who must commence litigation to resolve a dispute due to one restraint or another. However, while litigation may seem to be the be-all and end-all to resolve disputes, it can quickly become a time consuming and costly exercise. This article will examine some alternatives to litigation, particularly in light of the recent establishment of the Small Business Commissioner in Queensland.

Small Business Commissioner

On 19 April 2022, the Queensland Parliament passed the Small Business Commissioner Act 2022 (Qld). The legislation creates a new office of the Small Business Commissioner. The office of the Commissioner has been given powers whereby the Commissioner may resolve through mediation small business disputes.[1] Under the legislation, a small business dispute means a small business lease dispute or small business franchise dispute.[2] In other words; you can approach the Small Business Commissioner where you have a dispute arising:

1. from entering into a lease for premises under the Retail Shop Leases Act 1994 (Qld) where you conduct a small business; or
2. from a dispute about a franchise agreement to which the Franchising Code of Conduct set out in the Competition and Consumer (Industry Codes—Franchising) Regulation 2014 (Cth), if the franchisee or franchisor under the agreement carries on a small business.
   (Jurisdiction)

While the Commissioner’s jurisdiction is limited, as outlined above, what is a ‘small business’ will depend on the definition under the Retail Shop Leases Act 1994 (Qld) or the Competition and Consumer (Industry Codes—Franchising) Regulation 2014 (Cth). Indeed, it was Parliament’s intention to have the definition of ‘small business’ left unanswered.[3]

The Small Business Commissioner offers a new opportunity for those operating small businesses who would otherwise need to attend a forum such as the Queensland Civil and Administrative Tribunal (QCAT) or the Magistrates Court of Queensland to resolve a dispute. Disputes are to be resolved between the owners of the businesses directly, and agents (including lawyers) can only represent a party if the party is a corporation or if the mediator is satisfied that an agent should be permitted to represent the party.[4] In other words, the Commission is likely to become a lawyer free zone.

To proceed to a mediation under the Small Business Commissioner Act 2022 (Qld), the following elements must be met:

1. the parties must have previously attempted to resolve the dispute through the Commission’s informal process; and
2. the dispute must be within the Jurisdiction of the Commission; and
3. the approved form must be completed by the parties; and
4. all parties to the small business dispute must agree to the mediation process.[5]

Other notable matters arising from the Small Business Commissioner Act 2022 (Qld) include:

• The mediation is to be held in private[6] and it is an offence to make an official record of anything said at the mediation conference.[7]
• Any evidence or admissions made during the mediation cannot be used in later proceedings either before a Court or a tribunal.[8]
• If a party does not meet an obligation under a mediation agreement, the party seeking to enforce the mediation agreement has to apply to a Court to seek orders for compliance.[9]

The enactment of the Small Business Commissioner Act 2022 (Qld) represents a new opportunity for those running small businesses to resolve disputes within the Commission’s Jurisdiction informally and cost-effectively.

Conclusion

While some matters will always end up before a Court, there are avenues available for owners of small and medium sized businesses to resolve disputes without commencing litigation. This includes the new option of a mediation under the Small Business Commissioner Act 2022 (Qld). Regardless of the nature of the dispute, it is important that you act in a timely manner to obtain legal advice and take the necessary next steps to protect your interests.

[1] Small Business Commissioner Act 2022 (Cth) Pt 3.

[2] Ibid, Sch 1.

[3] Explanatory Memorandum, Small Business Commission Bill 2021.

[4] Ibid s 25.

[5] Ibid ss 21-22.

[6] Ibid s 26.

[7] Ibid s 31(1). However, the mediator may take notes of the mediation conference in a manner the mediator considers appropriate: see section 31(2) of the Act.

[8] Ibid s 32.

[9] Ibid s 35.