Telecommunication outages infrequently occur, however, when they occur business operations can be significantly impacted. Some recent high-profile internet outages have affected Optus, Telstra, iiNet and Virgin personal and businesses customers. When a service disruption occurs, generally the service provider will arrange compensation to consumers impacted. For example, Telstra provided free data for a day to their mobile customers in 2016.

However, business owners may also be entitled to additional forms of compensation if their business has been adversely affected as a result of the service interruption through making a small business complaint to the Telecommunications Industry Ombudsman (TIO)

If your business has been affected by a service outage, it may be beneficial to consult with LawPath’s experienced business lawyer.

The Telecommunications Industry Ombudsman (TIO)

The TIO provides independent and free dispute resolution services for small business and customers concerning telephone or internet services. The TIO has the authority to make enforceable determinations up to $50,000, they can make recommendations on matters up to $100,000. The TIO is the main avenue that small businesses can use to make a claim for compensation against a service provider.

Small Business Complaint

The TIO can only hear complaints from small business, determined on an individual basis. Considerations the TIO will account for include the nature of the business making a claim, and whether that type of business is small or not-for-profit. Additionally, the TIO will consider if the business structure is typical of a small business and if the issue in dispute is typical of a small business. The TIO also provides a guide of the common type of businesses that have access to make a small business complaint.
A complaint to be lodged and managed entirely online, or it can be submitted in writing or over the phone.

Claims That Can Be Investigated

For a dispute to be heard by the TIO, the claim for compensation must be based on actual or monetary losses suffered from a direct result of the actions or inactions of the service provider. However, the TIO will only consider claims for losses that a reasonable person would anticipate in all the circumstances.

The TIO recommends a business should present their claim as Total Lost Profit.
That is,’lost revenue’ plus ‘costs incurred in reducing loss’ minus ‘expenses normally incurred’.‘Lost revenue’ is determined by subtracting the actual revenue earned in the claim period from the revenue the customer would have expected to earn if the disputed event had not occurred. ‘Costs incurred in reducing loss’ includes all the costs the business incurred during the period to minimise losses. ‘Expenses normally incurred’ include all regular expenses incurred during this period.

The TIO will consider whether a complainant took reasonable steps to protect their interests or to mitigate their potential losses when determining a compensation claim. Additionally, a business may be entitled to the cost of measures taken to minimise the loss incurred during a service outage. For example, buying an interim internet service while regular service is interrupted.

Documentation

The TIO will take into account any substantive documents that are presented by the small business bringing a compensation claim. Documents such as bank statements, monthly income figures, profit and loss statements and sales journals can be considered by the TIO when making a determination. The TIO may also take into account other relevant documents including:

  • Data showing the number of incoming calls received during the claim period was less than the amount received in the preceding and following months.
  • Proposals for contracts lost as a direct result of the action of the provider.
  • Statements from customers who state they did not spend money on the business as a result of the circumstances in question.
  • Receipts or invoices for claims for reimbursement of out-of-pocket expenses, where these expenses were costs incurred in reducing or mitigating losses.

The greater amount of relevant documents a small business can provide to the TIO, the stronger the case will be. Business owners must be aware that in the absence of documentary evidence to support a claim, the TIO may exercise its discretion not to investigate further.

Conclusion

While the TIO allows claims to be made for business losses arising from a service disruption businesses must be aware of the relevant requirements in making a claim, as discussed above. If the TIO can not investigate your claim, LawPath can get you in touch with an experienced business lawyer to discuss your legal rights with your service provider.

Contact a LawPath consultant on 1800 529 728 to learn more about customising legal documents, obtaining a fixed-fee quote from our network of 700+ expert lawyers or to get answers to your legal questions.

Daniel Saouma

Daniel is a Legal Intern at LawPath working with the content team. With a interest in consumer and media law he has completed a Bachelor of Business degree majoring in Marketing and is currently completing his law degree at the University of Technology Sydney.