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The Government had previously set out its proposals in the Enterprise Bill for a new Small Business Commissioner to lead a culture change in how small businesses resolve disputes with larger companies.
They intended that he or she would help small businesses handle disputes over late payment and other supply chain practices by providing access to advice, support, mediation and conciliation services, and have the power to look into complaints and report on its findings. (See: Latest Government initiative to tackle late payments - July 2015, Shout99.
However, Lovetts thinks that the focus should be on helping small firms use existing legal remedies.
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“Just one per cent of the debts coming to us for legal intervention are disputed so while this measure, first announced in May, is a step in the right direction, it is not going to change the behaviour of habitual late payers.
“Whoever takes the role of Small Business Commissioner needs to help small businesses to use the tools and late payment law already available to them to claim late payment compensation and interest.
"A Letter Before Action which can be issued for as little as £1.50 works in 84 per cent of cases and under the Late Payment law, businesses can make claims for debts going back six years.
“The law is there, businesses just need guidance on how they can use it and more realistic recoverable legal costs would further discourage late payers from risking court claims, and encourage the new culture that business so badly needs.”
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Susie Hughes © Shout99 2015
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