Historically, doctors were far more likely to end up in Court facing a damages claim, than owners of small to medium-size businesses.
However, the recent Hepatitis A cases caused by frozen imported berries is a timely reminder that there is a growing number of Australian business owners who have been sued as a result of their employees or customers being dissatisfied, injured or even killed by their product or service.
Those people have discovered that the longer you are in business and the more people who are involved in the supply chain, the more likely it is that you will be caught up in an incident and be sued. Many of those people have also discovered the hard way that class action lawyers are very enthusiastic about pursuing damages claims where the people or companies involved in the incident have significant net wealth that can be used to pay the bill.
So if you want to be prepared for this risk of doing business, get specialist advice about:
- an appropriate structure to use to own your personal assets;
- an appropriate structure for holding your business assets;
- an appropriate structure to operate your business (the trading entity);
- what arrangements should be in place between these entities to ensure that the risk sits with the trading entity meaning that it is the one in the firing line if there is a claim while any valuable personal and business assets are quarantined from that claim; and
- how to cost-effectively restructure an existing operation to reduce your exposure.
People who have taken this advice have found that this sort of structuring has other benefits such as creating opportunities for family members, business partners or equity investors to become involved in a strategic part of their enterprise rather than the whole of it all at once.
Prepared by Leanne Matthewson
This publication has been carefully prepared, but it has been written in general terms and should be viewed as broad guidance only. It does not purport to be comprehensive or to render advice. No one should rely on the information contained in this publication without first obtaining professional advice relevant to their own specific situation.