Business disputes may be sorted cheaper in tribunal

Photo: Getty Images
Photo: Getty Images
Dealing with business disputes can be time-consuming and expensive, often distracting owners from core business.

Many business owners don't pursue low-value dispute claims because of this. If they do resort to court action, even the smallest claim can cost as much as $15,000 and take months to be heard by a judge - time and money businesspeople can seldom afford.

Compare the current median timeframe for having a case heard in the Disputes Tribunal of 55 days with the District Court median timeframe of 154 days from the date of filing to the hearing date.

Legislation paving the way for a doubling of the existing $15,000 claim threshold to $30,000 is awaiting Royal Assent. It will allow resolution of more disputes without the parties needing to resort to expensive litigation.

Parties can get legal advice and assistance with drafting a claim (and this can enhance their chances of success), but with the current threshold of $15,000 the cost may outweigh the benefit. However, when the threshold increases to $30,000, taking legal advice on claim preparation will be more worthwhile, as will taking a claim in the first place.

Disputes Tribunal claims are heard by a referee who is usually a barrister or solicitor, rather than a judge. Referees must consider the law and how it relates to a specific claim, but are also trained to apply a common-sense approach based on the merits and justice of the claim, and to help the parties come to an agreement. This is more a mediation process than a judicial one.

The Disputes Tribunal is a great platform for business owners and consumers who have a dispute considered to be "low value" overall, but of significant value to the parties involved. Parties who are less able to present their case in a coherent way may be disadvantaged, despite a referee's efforts to determine justice, as they may omit relevant information.

Parties to a tribunal hearing represent themselves. Filing fees are between $45 and $180 depending on the size of the claim. Compare that to the $900 half-day hearing fee for a District Court fixture.

However, the tribunal's jurisdiction is limited to disputes relating to vehicles, property, goods and services (including building disputes) and business transactions. You cannot use the Disputes Tribunal as a debt recovery service unless the debt is disputed. Other more specialist areas of law are also excluded, for example intellectual property and family law.

Unlike court proceedings, Disputes Tribunal matters are heard in private and the parties' names are not published in the decision summary. Orders can be made by a referee, and they can be enforced through the District Court if necessary.

Sally Peart is a partner in Marks & Worth Lawyers and IP Specialists and advises businesses on a wide range of commercial and intellectual property law issues.


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