Colin Porter, Managing Director of CreditorWatch welcomes the announcement of the Federal discussion paper on Small Business Disputes released on Friday, May 20. However, he believes that the key issue – early and effective mediation – should be the main focus of the discussion document.
“The early mediation process is critical,” Porter explains. “It’s a process that’s extremely difficult for a small business to manage. Issues that could have been resolved early in the piece often escalate to become disputes purely because there’s no framework or process for affordable, effective mediation,” he says.
Porter warns that the suggested National Dispute Resolution Service must be fast and effective if it is to have a positive impact.
“Small companies just don’t have the time or capacity to work with a high bureaucracy agency.”
Porter also expressed surprise that the paper didn’t suggest changes in the Small Claims Division of the Local Court system.
“The small claims court should be the answer to this problem. By imposing a more rigorous and enforceable system we would quickly have a more effective dispute management process.”
At present, the small claims court process is relatively inexpensive but it is not mandatory for parties to appear at court for a small claims hearing and any orders handed down are not enforced by the court. If the creditor is successful in court but the debtor doesn’t pay, it is the creditor’s responsibility to enforce the judgment.
Porter is an ardent defender of small business issues. CreditorWatch is the only online platform dedicated to protecting SMBs from bad debtors.
Since going live in December 2011 CreditorWatch has signed on more than 2,000 businesses to the service offering business owners a more intelligent way to manage who they sell to on credit terms and reduce their vulnerability to bad debt.