Originally published in The Canberra Times

By Bruce Billson

Competition laws will work better for small businesses with a dedicated court list.

For small businesses, effective competition is vital. Knowing they can compete on a level playing field, a small business can confidently start an enterprise, invest, take risks and accept the responsibilities of business ownership.

Effective competition is an essential precondition to small business entrepreneurial endeavour.

Competition policy is about making markets work in the interests of consumers.

It drives efficiency, investment and innovation, all of which lead to lower costs and improved product choice for consumers, and enhanced productivity.

The laws and regulations that give effect to competition policy promote fair commercial conduct and protect against anti-competitive behaviour.

Firms should compete to delight customers on the merits of their offer, not misuse their market power to constrain consumer choice to options of lesser value.

Australia's national competition framework is encapsulated in the Competition and Consumer Act, which includes the Australian Consumer Law and related industry codes.

To deliver on these public policy objectives, a much more accessible avenue for seeking justice that is easily within the reach of small businesses is needed.

An urgently needed reform is the creation of a Small Business and Industry Codes List in the Federal Circuit and Family Court of Australia to provide small businesses with a more accessible, affordable and timely avenue for resolving commercial disputes in the federal jurisdiction.

This reform would be a practical solution to the systemic barriers that small businesses face in enforcing their legal rights, including the cost, time and complexity of legal proceedings.

While the Australian Small Business and Family Enterprise Ombudsman offers assistance and facilitates access to alternative dispute resolution (ADR), these processes are no guarantee that a satisfactory outcome can be achieved.

We see many cases where resolution is delayed or not achieved due to the refusal of one party to participate in the processes in good faith and with a view to resolving disputes to the benefit of all parties.

This is hardly a strong incentive for a well-resourced respondent to adopt a resolution mindset to a dispute with a small business when they suspect that the small business is not in a position to take the next step of court action if satisfactory resolution is not reached through ADR.

I have also seen examples of agreed mediated resolutions not implemented, leading to more distress, angst and anger for small business owners who feel they have nowhere to turn to fix their problem.

The implied "promise" to enterprising women and men is that effective competition that promotes fair commercial conduct, supported by robust enforcement by the regulators and the ability of market participants to exercise their legal rights, ensures that the business environment is as conducive as it can be for small and family businesses.

But this promise is unfulfilled. Not by intent or design, but as a consequence of limitations in the judicial system within which the framework operates, and in the enforcement actions of regulators.

Enforcement of the competition framework typically requires action to be taken in the Federal Court of Australia, and this is no place for a small business.

Taking action in the Federal Court will likely need hundreds of thousands of dollars, potentially face legal manoeuvrings and obstacles, it can often take years to get a decision, and there is the risk that the small business litigant will have to pay the costs of the other party if unsuccessful.

All of this means that a small business owner with limited resources and capacity may choose not to take legal action.

So, small businesses are heavily reliant on the actions of regulators in the hope and expectation that this will foster fair commercial conduct and compliance with regulatory obligations to prevent anti-competitive conduct.

Only regulators and big corporations have the resources to pursue competition and fair commercial conduct matters in the Federal Court.

Even regulators have to "ration" their public resources for investigations and enforcement action.

They understandably prioritise matters that involve systemic/repeated breaches of the law, have significant economic impacts, are conduct attracting considerable public interest, and high-profile or prominent enforcement that can potentially send a very loud and clear message about what is acceptable commercial behaviour.

The rationing of enforcement action and high costs, and risks of pursuing matters in the Federal Court mean that a small business can be harmed by conduct that infringes on their legal rights or Code obligations.

It can put their business at risk, and any personal assets used to secure business finance, leaving them feeling like they can't rely on the law for protection.

So, they are left pleading with the regulator to take up their case and are often disappointed that their matter does not get through the investigative or enforcement "gates".

For small businesses, the assurances that they can confidently invest, take risks and engage in trade and commerce with the knowledge that the competition framework will promote fair commercial conduct and protect against anti-competitive conduct are not reliable or meaningful.

For too many small businesses, legal protections are illusory, and regulators are viewed as "hunting dogs that won't leave the porch".

Even where the merits of an argument are contested, small businesses need to be able to advance and defend their own economic interests.

Access to justice needs to be timely and affordable, and capable of promptly abating or containing the alleged harm.

If court action is required, it needs to be supported by right-sized rules and processes so that the merits of competing arguments can be weighed and assessed efficiently and effectively, and determined competently and without punishing delays.

By limiting punitive costs and adverse procedural or judicial manoeuvres, small businesses should be enabled to defend their own legitimate economic interests.

Responsive and restorative remedies are needed so that enterprising women and men can return to business of running of their businesses, as soon as possible.

Competition incentivises enterprises to keep their prices low, innovate and invest in new technologies for the benefit of consumers, helping to lift the incomes and living standards of all Australians.

Creating a Small Business and Industry Codes List in the Federal Circuit and Family Court of Australia is a practical solution to the systemic barriers that small businesses face in enforcing their legal rights by providing a more accessible, affordable and timely avenue for resolving commercial disputes that harm entrepreneurship.