Once you have decided that there is a dispute with a supplier of goods or services make sure all your communications are in writing.
If the supplier makes a verbal promise to fix the problem, ask them to put it in writing. Include the time and date, the full name of the person you deal with, and the details of the conversation – then sign and date it.
Dealing with emotions
Keep calm! Emotional reactions may be satisfying for a moment or two, but they also harm the chances of reaching an amicable solution.
Sometimes a respectful attitude will earn you points with the supplier. Like anyone, suppliers can become defensive when attacked, and often this will end any negotiation.
A good tactic is to maintain an even tone in your voice (no matter what you're really thinking!).
Don't make written comments that insult a supplier's professional standing or reputation, even if you believe it is absolutely true. At the least the supplier will be defensive and angry – at worst you might find yourself with a defamation action on your hands.
Of course, you may be met with intimidating behaviour from the supplier, or perhaps they will refuse to negotiate.
At this time it is best to get professional advice, but try to leave the door open for a settlement ('I'm happy to talk to you if you really want to resolve this problem, otherwise I think we should look for other ways to deal with this problem').
Here are five steps you can use to resolve a consumer dispute with a trader or supplier of goods or services:
- Contact the business, or write a letter of complaint. Remember to take notes of the conversation, and follow it up with a letter (see paragraph below). You can also consider a letter of demand.
- See if there is an industry association (e.g. a retail traders association) that deals with disputes. Sometimes they have standards that they expect their members to uphold and a complaints resolution mechanism. Get in touch with your State/Territory Consumer Affairs or Fair Trading Office for contact details.
- Your State/Territory Consumer Affairs or Fair Trading Office will be able to offer advice on your rights and other helpful information. They also have legal powers to investigate situations where consumer laws may have been broken.
- Get legal advice.
- Go to court/tribunal. Most State/Territories have small claims tribunals that allow consumers to represent themselves. Do not take steps to begin court/tribunal action unless you first understand your legal position.
A letter of complaint
As a first step, if you want to contact the business in writing to complain about a problem with the product or service (or as a follow up to a telephone call), include the following:
- your name and contact details;
- the issue – make the point without unnecessary detail;
- dates and places where the problem occurred;
- the solution you propose;steps you have already taken to resolve the problem;
- copies of all relevant documents (e.g. receipts and warranties); and
- a pleasant closing line – e.g. 'I look forward to your earliest reply to this letter'.
Getting legal advice
If you decide to get legal advice, make sure the lawyer deals with the type of problem you want to resolve.
Once you receive a letter from the supplier's lawyer, you should consider getting legal advice of your own, especially if it is a letter of demand for payment for services that you have withheld because you are not satisfied with the work.
A lawyer may be able to suggest ways to negotiate or a settlement that will solve the problem. If you delay or do nothing you may find yourself on the back foot, or as a defendant in court action.
Never sign any legal document you are sent without legal advice or understanding your legal position.
It's amazing how many straightforward consumer disputes end up in Local and Magistrates Courts!
It is often better to settle a dispute by negotiation than go to court, where the likelihood is that it will be settled 'out of court' anyway – by then you will have incurred a lot more costs, and you may have to settle on terms that were available before you launched the court action.
Once you get to court, the costs escalate very quickly. These may include:
- solicitor's and barrister's fees
- courts costs
- costs of reports
- witness costs.
If you lose the case, you will usually have to pay your own costs plus a part of the other side's costs as well. Many States now have specialist Tribunals that deal with consumer issues. In some States, eg Victoria the prohibits costs in claims under $10,000.
Alternative dispute resolution (ADR)
This is a way to settle a dispute through an independent third party, instead of going to court, with or without lawyers.
For instance, if you use mediation as a type of ADR, the session will be facilitated by people who have no stake in either side's point of view, and will give both parties equal opportunity to present their side of the argument.
The aim of the alternative dispute resolution is to find common ground between the parties and look for options to settle the dispute. For instance:
- 'conciliation' is a process where a conciliator helps both sides come together to settle the dispute, perhaps suggesting settlement terms;
- 'mediation' attempts to narrow the issues between the sides with the assistance of the mediator.
It is still important to get legal advice if you choose this route. You can get advice about the effect of statements you make in the session and whether they are confidential, and in some circumstances your lawyer may play a part in the mediation.
Advantages of ADR
Alternative dispute resolution is a lot cheaper than going to court and usually a lot faster.
In most circumstances it is more informal than courts, and many people feel more connected to the process because they are able to contribute directly to the outcome.
Last Updated – June 2012