FSB: Overhaul of civil courts system would 'spare' SMEs

New research by FSB has found that small and medium-sized enterprises (SMEs) in England and Wales pay out £11.6bn a year in legal disputes costs, creating a ‘huge burden’ on the SME community.

FSB believes an overhaul of the civil courts system and the strengthening of an alternative dispute resolution would save small firms considerable time and money.

A new report published this week, titled ‘Tied Up: Unravelling the dispute resolution process for small firms’ states that almost three-quarters (70%) of small businesses encountered at least one dispute in recent years.

The average figure disputed in civil courts is around £18,000, however the cost of resolving the dispute is an additional £17,000 in terms of ‘time and money dealing with the problem’.

FSB wants a ‘new approach’ to prevent disputes from occurring in the first place, facilitating faster, fairer and cheaper resolution if they wish to pursue an issue further.

The organisation also believes the new Small Businesses Commissioner, proposed by the Government earlier this year, should seek to create an online hub, aimed at offering guidance and support to time-precious small business owners.

An overhaul of civil court fees was also suggested, introducing a specialist commercial track within the county court system that would make it ‘cheaper, quicker and fairer for small firms’.

Mike Cherry, National Chair, FSB, said: “We want to see a beefed up system to bring about fewer disputes and faster resolutions for small firms. A huge burden would be lifted from small businesses by rebooting the system around prevention and resolution of disputes.”

Date published 8 Dec 2016 | Last updated 8 Dec 2016