The Senate showed its love for small businesses this Valentine’s Day by passing an amended Bill which will enable small businesses to seek a “no adverse costs order” when they are suing big businesses or the government for damages relating to competition law breaches.
The Bill will now return to the House of Representatives, where if passed will commence the day after royal assent, but the amendment will apply to actions for damages brought on or after 1 July 2019: Sch 5, item 8 of the Bill.
“At the moment, if a small business owner takes big business or the government to court, they have to cover their own costs and take the risk of paying the other side’s cost if they lose or withdraw from the case.
“The Treasury Laws Amendment (2018 Measures No. 5) Bill 2018 would allow a small business to request a ‘no adverse costs order’ early in the court case and if the judge decided the case was in the public interest, the small business wouldn’t have to pay the other side’s cost if they lost.”
The court may only make a “no adverse costs order” if it is satisfied that the case raises a reasonable issue for trial; and the case raises an issue that “may also be significant for other persons or groups” and the disparity between the financial positions of the applicant and the respondent(s) is such that the possibility of an unfavourable costs order might deter the applicant from pursuing the case.
The proposed “no adverse costs orders” power relates to actions for damages under s 82 of the Competition and Consumer Act 2010 in relation to competition law contraventions of Pt IV, including misuse of market power, cartel conduct and anti-competitive agreements.