Australian Convenience Store News

The major oil companies are relying excessively on lawyers to sort out problems with their dealers, which could easily be solved in the field by more astute management. This is wasting time, money and energy.

Australia is an increasingly litigious place. It appears that, after the United States, Australia maybe the second most litigious country in the world.

There may be a number of reasons for this. A multitude of Courts and Tribunals in which matters can be heard, governments at local, state and federal level pushing out numerous laws that often conflict but are designed placate everyone.

An increasingly aggressive and competitive society where people push matters to the boundaries or fail to take into account the other persons point of view, people failing to discuss things with each other, or people who are failing to address commercial reality and looking for scapegoats. Further, deregulation and the global economy increasingly means to many people a quick erosion of rights that their parents and grandparents have spent securing over a hundred and fifty years means that many people are angry.

The Service Station/Oil/Convenience Store Industry has many litigants. This is unfortunate. For all the talk about OilCode, Mediation in the 80ís and 90ís, they have in effect been dismal failures because they are vague and uncertain, have no teeth and do little to stop excesses of self interest. The whole debate in respect of these matters is being overshadowed by academics who are not in business and have a very destructive notion of consumerism and competition in which in the end will not support a viable petroleum industry. Often what people are concerned about are symbolic statements and with things looking good and not with practical outcomes. This has coloured management and business practices in the oil industry in the last twenty years.

Clearly, in respect of any dispute, be it commercial or otherwise, one should always attempt early on to settle. Any person in business, is not in business to litigate. If after various attempts to settle have proved unsuccessful then litigation should be contemplated, only after all other alternatives have been exhausted. There should be a strategy in respect of the litigation and it must serve some useful purpose. People should not litigate because they are angry. Any decision to litigate should take into account the following, cost, management down time, impact upon lifestyle and your business.

Often persons embarking upon litigation have failed to understand or articulate their complaint. Many clients are deeply upset about their situation and may in many instances be losing money, however, do not themselves have a cause of action against anyone. In such circumstances, people must understand what their complaint is, and why it is the responsibility of someone else to resolve that complaint. For example, just because you are losing money, does not mean that you have a case. The loss of money must be directly attributable to some breach of duty or contract, representation or unfairness by some other party.

Whilst people might have a legitimate complaint many persons are unable to be successful litigants because they do not have the required level of proof to prove their case. Accordingly in commercial dealings, one must retain file notes, letters, documents, contracts and keep detailed records if a person can argue its case.

The most successful litigants are people who have something to say and can prove it in a detailed way.

Often oil companies engage in litigation against their franchisees and distributors, for ridiculous and uncommercial reasons. In many instances rather than pay a dealer or distributor fifty thousand dollars for some wrong committed years earlier, the oil company will endeavour to hide the matter for a number of years and then engage an army of lawyers and consultants and spend half a million dollars to protect fifty thousand dollars. This is increasingly the case. The reasons perhaps for this is that in a lot of cases no one is aware of the real nature of the dispute and do not have a firm understanding of the business.

Further, the insecurity of employment of the average oil company employee has meant that they fail to make decisions and do not wish to take on the responsibility or negativity for any dispute, even if this makes it good leadership or saves the company money.

Resolution of many disputes are delayed because it gives some employees with nothing to do, something to do. Armed with consultants and lawyers one can argue all sorts of things about nothing. If one did a cost benefit analysis between settling and resolving a dispute early in terms of money and down time as opposed to protracted litigation, clearly it is obvious that the dispute should be settled early. However, there does not appear to be such deep thinkers in many of our oil companies who wish to look more after their own bottoms rather than the bottom line. Paying $450.00 per hour for a city based external litigation lawyer demonstrates a failure of the Oil Company to do business, handle issues and look after its own affairs, and wastes money that could be used for investment in the business. Moreover, it demonstrates that the Oil Company employs the wrong people who do not understand the value of money, (as it is not their money), who donít get involved.