Cash Strapped Businesses Unable to Take Legal Action
Small enterprises have an average of three legal disputes a year but majority can't afford to take issues to a small claims court
44% of UK small businesses have decided not to act upon a legitimate legal grievance even though it would have been in their best interests, a report from Ajuve has claimed.
The survey of 500 small businesses revealed that 43% of business owners don’t have enough time to legally pursue a dispute while 41% are unable to afford the costs involved with taking someone to a small claims court.
35% of business owners also said they had held back on taking legal action due to the ‘awkwardness’ of dealing with the other party.
The survey found that small enterprises have an average of three legal disputes a year and 21% have more than five a year yet 39% of respondents admitted to not having any practices in place to deal with potential disputes.
When quizzed on current small claims legislation and procedure, 65% of enterprise owners believe the current system to be ‘outdated’ – 58% want to see the claim approval time reduced to six weeks or less as it typically takes between six months and two years for a claim to be determined.
Alex Bargate, CEO of Ajuve, said:
“Our research highlights just how unmanageable the small claims process has become for small businesses, leaving many unable to afford the huge sums of time and money involved with pursuing a claim.
“It is simply unacceptable that small businesses are being priced out of accessing the justice system – it’s time for the court system to provide a service that is simple, efficient and accessible for everyone.”
Have you considered taking someone to a small claims court? Here’s what you need to consider.