MEDIA RELEASE - LABOR'S PLAN TO HELP SMALL BUSINESSES FIGHT ANTI-COMPETITIVE BEHAVIOUR - 14 MARCH 2016

Labor has today launched a new plan to ensure small businesses have access to justice when confronted by anti-competitive behaviour.

The Abbott-Turnbull Government has sat on this for months. We’ve seen a government paralysed by inaction, including a non-response to the Harper Review and a Treasury discussion paper with six options, leading to additional confusion and uncertainty.

Labor has been upfront about not supporting an ‘effects test’. It will be damaging to planned investment and interfere with day-to-day decision making across the economy. It’s an un-costed, multi-billion dollar disaster waiting to happen. It’s a lawyers’ picnic.

Instead, we know a responsible government can act to even the playing field. Today we have put forward a practical alternative.

The feedback on access to justice has been consistent. The major barrier to private litigation under the Competition and Consumer Act is the potential cost liability to the applicant if a case is lost. These Federal court cases are often David versus Goliath, and Goliath has deep pockets.

Our policy addresses these concerns pragmatically.

Labor will permit Federal Court justices to waive the liability of litigants for opposition costs in Part IV litigation under the Competition and Consumer Act. Private litigants in these cases are often smaller interests who are less well funded than their opponents. This change will allow cases to proceed without the potential of millions of dollars of opposition court fees being claimed. Support from the Small Business Ombudsman has been costed by the Parliamentary Budget Office at $1 million over two years. Aside from this modest extra resourcing for the Small Business Ombudsman, this proposal will not have any other financial implications for the commonwealth.

This will change the dynamics of small businesses and their representatives in the ability to bring private litigation. Those who misuse market power or seek to price fix amongst other uncompetitive practices will be subject to closer scrutiny. This will remove one of the biggest barriers to bringing litigation, the potential for adverse costs by powerful vested interests.

Encouraging sensible private litigation where anti-competitive behaviour is proved is a public good. This is a modest, sensible proposal to provide some support for small businesses without damaging competition in the process.

In addition, we will fund the Small Business Ombudsman to provide assistance to potential litigants by assessing the likelihood a Federal Court judge will impose a no adverse cost order. While this will not be legally binding, it will provide more certainty for the private litigants in a forum outside of the courts.

More information about Labor’s plan can be found here

MONDAY, 14 MARCH 2016