A new report published by the Federation of Small Businesses (FSB) has revealed that commercial disputes are costing small businesses in England and Wales at least £11.6 billion each year.
The FSB’s report revealed that 70% of small businesses have faced at least one dispute between 2010 and 2015.
According to the research, the average amount under dispute is £18,000, with the FSB finding that it can cost businesses an additional £17,000 in handling the issue.
Additionally, 72% of small businesses’ legal problems are due to late or non-payment, the report also revealed.
The FSB outlined a host of ‘devastating’ consequences that small businesses dealing with disputes may experience, ranging from short-term cashflow difficulties to insolvency.
Mike Cherry, National Chairman of the FSB, commented: ‘The dispute resolution process faced by small businesses in England and Wales is costly and complicated. Billions of pounds are flowing out of small business pockets as they try to claw back unpaid debts.
‘We want to see a beefed up system to bring about fewer disputes and faster resolutions for small firms.’