A new Small Business Commissioner will assist SMEs in resolving disputes with large businesses under draft government proposals.
The position will have 3 main functions:
- Providing advice
The commissioner will act as a first point of contact for small businesses. They will offer general advice about how to handle disputes. Businesses will be referred to specialist bodies if the situation requires it.
- Offering mediation
The commissioner will provide a voluntary mediation process if the 2 businesses cannot resolve the dispute on their own. Mediation will be a quicker and cheaper alternative to legal action for SMEs.
- Handling complaints
The commissioner will investigate complaints and report on their findings.
The Department for Business, Innovation and Skills is currently consulting stakeholders and will publish its final proposals in the future.
The announcement comes after a series of recent surveys revealed the extent of the damage caused to small businesses by unfair payment practices. The Asset Based Finance Association revealed that small businesses wait an average of 72 days before receiving payment.
Research by the payment company Bacs found that SMEs are collectively spending £10.8 billion each year chasing overdue payments.
Small Business Minister Anna Soubry said:
“Small businesses are owed £26 billion in late payments and spend millions more chasing down money they have already hard earned through hard work. This is simply unacceptable – it limits their growth and productivity, and can put an otherwise successful business at risk.
“The Small Business Commissioner will tackle imbalance of bargaining power between small suppliers and large customers, and encourage them to get round the table and sort out disputes at a fraction of the cost of going to court.”