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Ministers propose small business commissioner to mediate late payment disputes but legal penalties not ruled out

posted on Aug 1, 2015

A new small business commissioner would help small firms tackle £26bn a year in late payments, the government has proposed.

Announced in the Queen's Speech, the Department for Business, Innovation and Skills has today opened consultation on a new body to handle disputes over late payment between small firms and their large clients. 

The commissioner would have the power to investigate complaints and publicly name and shame those companies that follow poor payment practices or instigate unfair terms such as forcing suppliers to slash prices in order to retain a contract.

The mediation service is unlikely to be free to small company owners wanting to access it as they would need to pay a fee. 

One of the funding options being considered by the government is basing it on the cost of mediation in family law cases which is £50 (+VAT) for a one hour session for claims under £5,000 or £425 (+VAT) for four hours if the claim is between £15,000 and £50,000.

Ministers have been inspired in their idea by a similar scheme in Victoria, Australia which has seen half of cases successfully resolved at 30% or less of the cost of litigation.

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Source: https://www.enterprisenation.com

Image source: Enterprise Nation

 

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