Minter Ellison partner Josh Simons. Picture: Mark Brake Source: National Features THE introduction of a duty of good faith in franchising is likely to change the underlying relationship between the nation's franchisors and their franchisees, experts say. The Federal Government's review last week recommended the introduction of good faith into the Code of Conduct but also recommended it not be defined, a nod to the developing case law on the concept. Minter Ellison partner Josh Simons says there is still a problem, in that there is no clear definition and there remain a number of differences between the states. "The concern behind this approach is that a party will take advantage of technicalities in order to bring about an unfair outcome but they have to treat each other in a way that is honest and fair," he says. I don't think it will capture any more (inappropriate) conduct but in a public perception sense, it may become more relevant. One of the biggest issues in a franchising dispute is franchisees don't have the funds to sustain a protracted legal fight and a dispute involving good faith opens that up. It is going to be up to a court to decide whether their action was in good faith. He says there may also be a political element to the introduction of the good faith doctrine as Federal lawmakers attempt to maintain uniformity of law with South Australia and Western Australia, both of which intend to introduce state-based codes of conduct based on good faith. Thomsons Lawyers partner David Gaszner says the change is unlikely to affect franchising behaviours. "There will always be parties who make bad bargains no matter how many disclosure obligations exist and how brightly the spotlight is shone on the need to obtain competent independent advice," he says. Imposing a duty of good faith, consistent with the common law - or even attempting to statutorily define such a duty - will not stop people doing that and it will not and, in my view, should not absolve them of the consequences of their own conduct. Again though, the law should however provide remedies where the conduct complained of is in fact unconscionable or otherwise unlawful ... and it does. I think the majority are already dealing with each other in good faith. It would be, and is, bad business to do otherwise. Franchisors or franchisees might instead claim the other has been "unfair," he says, although they are likely basing that conclusion on the belief they have been wronged. If there is to be a formal dispute, the fact that an allegation of a breach of good faith may be involved will in my view not add to - and certainly not significantly add to - the total cost of the process. I think such allegations are already made as the scope to do so exists within the existing law," he says. Adding a specific definition would encourage people to litigate its meaning, he says.