Understand and manage your dispute

For small businesses with limited resources, the most costly part of the dispute resolution process can be the time taken away from the business.


Problems arise every day between small businesses, their customers, suppliers and employees. Most of these are dealt with quickly and efficiently through common sense. However, sometimes these problems escalate into a dispute which requires further understanding and assistance to help resolve it.

In general, there are five phases to dispute resolution:

1. understanding the dispute

2. talking to the other party

3. formally writing to the other party

4. seeking assistance from a third party

5. taking the matter to court.

Phase 1 – Understanding my dispute

A good understanding of your dispute will help you to make informed decisions about the best way to try to resolve the dispute.

Consider what led to the issues arising, what had been agreed in the first place and what the key issues really are. Did you have a contract in place? It is important to understand the rights and responsibilities of each party to the contract. Give consideration to what the other party may be thinking and test your position with a trusted advisor.

Read more about understanding your dispute.

Phase 2 – Discuss the problem

Now that you understand your dispute it is time to talk about it with the other party. If the issue is minor, a telephone conversation may be all that is needed, but for more complex matters an in-person meeting can be more successful.

It is important to prepare for your meeting, completing the steps in Phase 1 is a great place to start. In your meeting stay calm, be professional and be prepared to negotiate and compromise. Be sure to make clear written notes about your discussions and any outcomes which were agreed.

Read more about discussing the problem.

Phase 3 – Put it in writing

If talking over the issue didn’t work, writing a polite business-like letter is the next step. Putting your concerns in writing provides the other party a chance to fix the situation before further action is taken and also gives you a document which can be used as evidence if the situation needs to be escalated.

If your dispute is complex or writing isn’t your strong point it may be a good idea to get some help writing this letter.

Read tips for writing a letter of concern and see an example letter.

Phase 4 – Get a third party involved

Alternative dispute resolution (ADR) is an alternative to going to court to resolve your dispute. ADR is generally quicker and less costly than court and gives you more control over the outcome. Common types of ADR include facilitation, mediation, conciliation and arbitration.

The language used in dispute resolution can be confusing. The National Alternative Dispute Resolution Advisory Council (NADRAC) has a glossary that helps to explain common terms used in dispute resolution in Australia.

There are a lot of dispute resolution services available to help resolve business disputes. Dispute Support is an online dispute resolution information and referral tool. It will help you to find the most appropriate low cost service to help you to resolve your business dispute. 

Phase 5 – Take it to Court

Taking the matter to court should be the last resort. Court is expensive, time consuming and the outcome is out of your control.

Legal Assistance

In some circumstances it may be helpful to seek legal assistance to understand and/or resolve your dispute, especially if the matter is complex or involves large sums of money.

There are services in each state and territory which can refer you to an appropriate lawyer or legal firm based on your particular dispute. Many states and territories also have free or subsidised initial advice available.

Find out more about legal assistance in your state or territory.

If you require further assistance, the Australian Small Business Commissioner Information Line can provide information and assistance, including helping you to identify the most appropriate service to resolve your dispute. You can contact the Information Line on 1300 650 460.