26 November 2013

Cost and delay discouraging small businesses from seeking justice, says survey

Kain: pretty poor deal

Small business owners feel they are getting a poorer deal from the judicial system at the expense of larger companies, new research has indicated.

Nine out of the 10 owner-managers surveyed by leading costs firm Kain Knight said this was because they cannot afford to take on expensive legal battles against better-funded opponents.

Almost two-thirds (63%) of the 70 small business owners surveyed said that even the cost of hiring a solicitor deterred them from taking legal action, meaning that 60% were prepared to represent themselves in court.

At the same time, three-quarters said the recent doubling of the small claims limit to £10,000 – a change most were unaware of – was a clear deterrent to taking legal action because they could not recover their legal costs.

Some 30% did not know that many solicitors take on commercial cases on a ‘no win, no fee’ basis, while 62% had heard of after-the-event insurance.

Almost all respondents felt that they should be able to get a case heard in court in under six months. Any longer than this would cause them stress and worry, and would distract them from running their businesses.

Matt Kain, a director of Kain Knight, said: “It’s clear that small business owners feel they are getting a pretty poor deal out of the legal system… Since Lord Jackson’s reforms began in April, we are aware of the increasing time it is taking to bring cases to court, and that there is insufficient capacity in the legal system to truly serve justice.”