Ombudsman names and blames fitness company for not engaging

Bruce Billson. Source: SmallBizWeek

The Australian Small Business and Family Business Ombudsman (ASBFEO) has taken the rare step of naming and reprimanding a physical training company for refusing to engage in dispute resolution proceedings with a small business owner .

Under federal law, ASBFEO is empowered to provide alternative dispute resolution services to small businesses, with the aim of arbitrating disputes before aggrieved parties pursue costly and time-consuming legal action.

In a recent notice, ASBFEO accused 20Volts, which offers electrical muscle stimulation (EMS) training, of failing to engage in alternative dispute resolution processes offered by a small, anonymous company.

20Volts operates four studios in Melbourne, Sydney and the Gold Coast, where members exercise in ‘underwear’ equipped with electrodes to deliver small electrical impulses.

The 20Volts also advertises ownership of personal EMS systems.

The ASBFEO has now issued a notice of refusal to participate in alternative dispute resolution, informing the other parties that 20Volts has chosen not to engage with the ombudsman or the small business owner.

“Despite my recommendation and the small business owner’s willingness to engage, 20Volts declined to participate,” said ombudsman Bruce Billson.

“Companies involved in 20Volts are warned of this bad practice and of the potential for 20Volts to repeat this behavior in future disputes,” he added.

The ASBFEO press release did not reveal the nature of the dispute and the mediator was unable to respond to SmartCompany inquiries before the deadline.

SmartCompany has contacted 20Volts for comment.

It is rare for the ombudsman to issue such an opinion, and only a few have been published since the creation of the ASBFEO in 2016.

When former ombudsman Kate Carnell issued a similar denial notice in 2020, relating to short-term commercial lender Prudent Capital, it was only the second such notice issued in the organization’s history.

“I am extremely disappointed with Prudent Capital’s refusal to engage in mediation and seek to resolve the dispute fairly and I continue to encourage Prudent Capital to reconsider its refusal,” Carnell said at the time.

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Richard V. Johnson