Small Business Commissioner: Payments complaints scheme now open

Small Business Commissioner: Payments complaints scheme now open

The role of the Small Business Commissioner (“SBC”) was created under the Enterprise Act 2016. The SBC is now available to accept complaints from small businesses with a view to helping them resolve payment disputes with larger businesses and tackle unfair payment practices. The service is heralded as being impartial, independent and free to use.

Although complaints will result in a finding that is not legally binding, it is expected that it will pave the way to resolve issues.

The SBC is also of relevance to larger businesses. They need to be aware that delaying payments to small businesses or otherwise adopting unfair payment practices will be more risky going forwards. Engaging in such conduct will mean they run the risk of a complaint being made and subsequent adverse findings being publicised. The SBC has the discretion to decide whether to publish its findings in a report – effectively “naming and shaming” larger businesses.

There are various rules as to: eligibility; the process to follow; the form and content of complaints; the time limits for presenting complaints (12 months); the powers / duties of the SBC; the relevant factors that will be taken into account in determining complaints; and the inclusion (or not) of the offending larger business in the SBC’s report.  The SBC’s website is now live and provides information to guide businesses through the rules, requirements and exclusions.

Prior to using the complaints service the small business should attempt to resolve the dispute and obtain payment from its customer, unless there is good reason not to have done so. Larger businesses should deal with complaints in a timely manner – delay could lead to the escalation of issues to the SBC.

If legal proceedings, mediation, adjudication or arbitration are already underfoot the SBC cannot consider the underlying complaint. Small businesses therefore need to consider at an early stage what option it wishes to pursue.

The Late Payment of Commercial Debts (Interest) Act 1998 is unaffected by the SBC complaints scheme and remains a useful tool in pursuing payments. For further information see:

/site/insights/publications/late-payment-of-commercial-debts

For more information on the SBC and its offerings (which includes general advice and signposting of small businesses to existing support and dispute resolution services), please see the SBC website:

https://www.smallbusinesscommissioner.gov.uk/

The government hopes that the new scheme will assist small businesses and herald a change in culture as to how businesses deal with each other.  We will wait and see whether this cultural shift arrives. If nothing else, the SCO website provides a useful starting point for less experienced small business owners / entrepreneurs and the addition of the complaints scheme to the small businesses armoury is to be welcomed.

For further guidance on how the SBC affects your business please speak to your usual S&B contact.

Contact our experts for further advice

Katie Philipson

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