The dispute resolution process can be referred to using many different, overly legal sounding ways (e.g. arbitrated outcomes, conciliation, collaborative law etc.) but it can be basically broken down to this, if you have a dispute within your business there are a variety of methods to have it resolved.

Why would you require dispute resolution in your business?

Small business owners may come across disputes with employees, customers, suppliers, and landlords for a number of reasons. A dispute exists when one or more people disagree with something and a matter remains unresolved.

How do you approach a resolution?

There is no need to be anxious about disputes in your business, they are common and small business owners can be at ease knowing that with some planning a resolution can come to light quickly. The process of the resolution should be simple, discreet, confidential, and transparent. All employees, customers, contractors and suppliers must be made aware of your businesses procedure for resolutions.

Dispute resolutions should not interfere with the smooth operation of your business. To help ensure this all your business contracts should include a clause or policy that requires work to continue normally during the dispute resolution process subject to any reasonable concerns about health and safety.

Above all, dispute outcomes should be quick, fair and handled sensitively.

What procedure applies to my business?

A fair and balanced dispute resolution process is important for smooth running of your business. Taking the time to set-up "best practice resolution process" in the beginning of your operations planning will help your business to run better when or if there are disagreements down the line. However if a dispute does arise that you haven't accounted for you can apply a variety of procedures to resolve it as soon as you can to return your business to full functionality.

What kind of disputes may affect my business?

Customer disputes refer to a customer notifying your business of dissatisfaction with a product or service. This is often rectified with a return of the product, a refund or exchange for a new product of higher quality. In the case of a service, a discount for works completed may suffice.

Common disputes you may come across are workplace disputes involving an individual employee or employees.

A contractual dispute refers to a contractual obligation or commercial contract that has not been completely fulfilled. Disputes arise when parties to a contract don't do what they have agreed to. A well-written contract can help you avoid any disputes but in some cases you may need to seek professional advice to resolve the matter.

How do you find a resolution?

You may choose to resolve the dispute with an informal negotiation, this being the cheapest and simplest way. Mediation and arbitration includes an independent third party to negotiate an outcome that meets the interest of both parties. This may include the assistance from organisations like VCAT (Victorian Consumer Administrative Tribunal).

Arbitration is more involved and a process similar to court proceedings but much less formal. The arbitrator will decide the dispute between the parties by considering all evidence in the case presented by both parties and make a decision that is legally enforced. The courts can also assist in uncovering a resolution but is the most expensive way to come to this conclusion. You may harm the relationship you have with the other person and will require a lawyer to go via this method.

If a third party is required, organisations like VCAT in Victoria offer a tribunal process that is inexpensive, accessible, efficient and independent. Costs start at $55.60 for claims less $500*, and go up from there depending on your claim. Small businesses may require dispute resolutions under the civil or administration banners and there is separate divisions set up for both. VCAT can assist in a number of areas from consumer and property related issues to Work Safe and state taxation queries.

It may take up to 6 months for your case to reach VCAT but most disputes are put to rest quickly taking between 15 minutes to 1 day to resolve the case. In more complex cases, which may require several hearings and statements, these can take a longer time to resolve.

What is the process for using VCAT to resolve a dispute?

  1. A user (you) files an application with the relevant list
  2. Mediation, directions hearings or compulsory conferences are held if required. Hearings give each party the opportunity to call or give evidence, ask questions of witnesses and make submissions.
  3. At the end of the hearings a member of VCAT either gives a decision on the spot or writes a decision after the hearing and delivers it as soon as possible.
  4. Up until this time the parties may choose to resolve their dispute, if however they disagree with the ruling from VCAT then they can appeal through the Supreme Court of Victoria but only on questions of law.

If you are interested in seeing how the process works you can view other cases resolved by VCAT members in a hearing, the process is efficient and not intimidating and can be a great support to you. On the VCAT website, you can find a list of locations and a list of daily hearings.

Who can assist you to achieve a full resolution in your state?

Lesson learned

Starting out in business can be a lesson in "what not to do". Richard Branson has been quoted to say that the reason he named his company VIRGIN, is because he was wondering what to call his new business and a friend mentioned 'we are all virgins in business'. You must start somewhere and starting can be hard. Some things in your business history will come easily, while others will be harder to master. Some lessons or mistakes are harder to swallow than others but generally once a lesson is learned you tend to adapt your business behaviors and start making smarter decisions. In time, you may require less legal solutions and hopefully you will not require dispute resolution. But if you do, you will be armed with the best defense possible: knowledge and experience.

Other Resources

* Cost is true and correct at the time and date of publishing.