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Where am I now? Lawlink > Law Reform Commission > Publications > Research Report 11 (2003) - Darling, please sign this form: a report on the practice of third party guarantees in New South Wales (by Jenny Lovric and Jenni Millbank)
Research Report 11 (2003) - Darling, please sign this form: a report on the practice of third party guarantees in New South Wales (by Jenny Lovric and Jenni Millbank) TABLE OF CONTENTS Terms of reference 1. Introduction WHAT WE WANTED TO DISCOVER 2. Securing family business borrowing: why guarantee transactions take place SMALL BUSINESS AND FAMILY BUSINESS 3. Who are guarantors and why do they sign?
Age Country of birth and language background Literacy Level of education Financial position of the guarantors Relationships
Trust Optimism Lack of choice Pressure Culture and Ethnicity Misunderstandings and misinformation Would the guarantor have signed regardless? 4. The lenders
Self regulation and codes of conduct Mortgage and loan brokers The Code of Banking Practice Financier’s lending policies and guidelines A guarantee by any other name
What proportion of small business loans require guarantees? What proportion of those guarantees are called upon and disputed? Risk assessment, business finance and criteria for the use of guarantees What kind of security is generally required?
with the borrower? What should a reasonable lender do?
“All moneys” clauses Information about the borrower’s loan
Where were the guarantors when they signed? Who was with the guarantor when they signed? Time to consider the contract? Opportunity to negotiate terms of the contract
Guarantors’ perceptions of legal advice Solicitors’ perceptions of their role The “independence” of independent legal advice Claims against solicitors The impact of Rule 45 on legal practice Who benefits from independent legal advice? HOW LONG BEFORE THE LOAN WENT WRONG?
How guarantors found out there was a problem with the loan
Settlement Alternative Dispute Resolution The Australian Banking Industry Ombudsman Problems with using ADR in guarantee matters Consumer, Trader and Tenancy Tribunal CONCLUSION 7. Litigation
Settlement once litigation has commenced Defences and cross claims Conduct of litigation Legal representation in litigation Cost and delay
The influence and application of Garcia
Usual practice versus recollection of the guarantors Credibility as a determining issue Stereotyping CONCLUSION 8. Implications of this report A. SIGNING
2. Guarantor relationships and gender 3. Informational disparity 4. The circumstances of signing 5. Legal advice 6. Lack of regulation
2. Need for certainty 3. The costs of dispute resolution 4. The need for accessible dispute resolution Appendices A. THE RESEARCH METHODOLOGY |
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