Small Business Mediation

Did you know that, in New South Wales, the state government’s $1500 fee rebate scheme can be used by small businesses to help pay the cost of mediation? In fact, there are free or cheap resources for small business mediation across all of Australia (links at the bottom of the article for state-by-state information).

But why would you end up in mediation anyway? Good question.

There are plenty of instances in which mediation is something a small business-owner would resort to, particularly with recurring lockdowns that see businesses shuttered for weeks on end. Beauty salons or small beauty brands can find themselves in tough positions with landlords and vendors or manufacturers. It might be hard to pay rent, so you’d like to ask for a rent reduction. Perhaps you need longer invoicing terms or need to ask for discounted rates after the fact for you honour your commitments at all in this difficult time.

Instead of heading to court for disputes – a cost that small businesses already in financial distress could hardly shoulder – there is another process to help settle disputes and financial problems: mediation. It’s usually cheaper and faster than court, says the NSW Small Business Commission, and is actually geared towards coming up with a resolution that everyone can accept rather than a winner-take-all approach.

Why mediate?

Price: It’s usually cheaper. There are no legal fees and most states have funds or services set aside for the small businesses mediation process.

Time: It’s usually faster than court so you’ll save time you can put to better use getting business back on track

Confidentiality: It’s not entered into court records, and you can choose to do it in person or online.

Outcome: Mediation strives to find an outcome both parties can tolerate. It might not be your ideal outcome, but it won’t be the other party’s ideal outcome either. You’ll both walk away with a situation you can handle, whereas court can leave one party devastated, financially or otherwise.

The NSW Small Business Commission says “Mediation is a confidential and cost-effective way to resolve a disagreement that you can’t resolve by yourself. Learn more about mediation and how it can help your small business.

Mediation helps parties to a dispute find settlement options that they can both accept, without having to go to court. Mediation involves a neutral third-party (the mediator) holding a meeting with the main parties to the dispute. The mediator will speak to the parties privately, as well as altogether, to help them explore all available options and try to find the best one that will work for all. Mediation can be done in-person or online.” 

The Commission says disputes that are suitable for mediation include:

  • Disputes between lessors (property owners, or landlords) and lessees (tenants) of shops, or commercial premises, which could be beauty salons, nail salons, waxing salons or any other beauty business that rents a premise
  • Lease, license or contract disputes between small businesses and Government agencies or local government
  • Disagreements between contractors and subcontractors
  • Franchise disputes

Daniel Massey, a mediator for the NSW Small Business Commission, says of the process “I think it’s a great service that the Commission offers to the public – it’s cheap and it’s efficient.

I’ve been extremely busy in the past year. In November, I did 14 mediations in just 20 business days, all COVID-related lease disputes…. In a mediation, I try and get the parties actually talking directly to one another rather than through their lawyers (most people still bring one, though it’s not compulsory). When you talk to the parties you actually find out what’s really important to them. Often people will tell the other side things about their situation which might be nothing to do with the law or the strict application of the regulations, but those things can have a real impact on how a landlord looks at their tenant.”

Would you like the start the mediation process?

Mediation resources for small business in each state can be found at the links below:

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