4 February, 2009
Disputes Tribunal changes to help small business
The Disputes Tribunal jurisdiction is to be expanded in an effort to reduce the amount of time small businesses are tied up in district court battles, Justice Minister Simon Power said today.
The move is part of the small-business relief package announced today by Prime Minister John Key. It is aimed at improving the business environment by reducing the impact of taxes on firms' cash flows, improving firms' access to credit, and reducing business compliance costs.
"Being tied up in district court dealing with small claims is one of the trouble spots for small businesses - it costs them valuable time and money," says Mr Power.
"The Government is very keen to smooth the way for these businesses, so we will encourage the use of the lower-cost and lower-compliance Disputes Tribunal by raising the threshold at which cases can be heard there.
"Currently, the maximum claim level of the Disputes Tribunal is $7,500, or $12,000 with the consent of both parties. To make life easier and cheaper for small businesses, the Government will lift those levels to $15,000 and $20,000.
"This change will reduce costs in up to 3,600 cases a year which will now be able to be held in the Disputes Tribunal. Previously these cases would have been held in the district court and many would not have been pursued due to the costs involved.
"This is designed simply to lighten the load on small and medium-size business so they can get on with the business of producing goods and services."
Expanding the jurisdiction of the tribunal also fulfils National's election promise to ‘increase the jurisdiction of the Disputes Tribunal to reduce pressure on district courts'.
The expansion of the tribunal is part of a five-part package. The other parts are: tax changes, expanding the role of the Export Credit Office, expanding business advice services, and creating a fast-payment requirement for government agencies.