Small companies get final say on late payment tsar

Businesses of “all sizes” are invited to have their say on new details about the ‘late payment tsar,’ but the smallest of companies should tackle five areas specific to them, officials say.

In fact, in the consultation ‘Small Business Commissioner: policy for secondary legislation,’ the business department directs time-pressed tiny traders to questions 1, 11, 12, 16 and 19.

Italicised below, the questions cover the definition of businesses in the SBC’s remit, how it will determine complaints and how it will decide whether to name respondents to complaints.

The mere mention of the latter -- which signals that the SBC will have a ‘naming and shaming’ power -- will please those who called for the commissioner to have ‘teeth.’

But the SBC will not be able to force parties in disputes it mediates on to provide evidence (it can only ask), and its determinations “will not be legally binding,” the consultation says.

And while its recommendations should help resolve a dispute between two warring parties, recommendations by the SBC may not always be made as part of its determination.

If they are not, the SBC must give reasons why it gave no recommendations but even if they are issued, the parties will not be under any legal obligation to follow them.

More positively for those who want the commissioner to take a tough stance, the SBC may publish a report of each case, and it may be anonymous or it “may name the respondent.”

Those reports will not just relate to non-payment. In particular, the commissioner expects to take cases about payment acts or omissions, such as a client seeking to alter fees agreed.

Another type of activity it can be approached about is where a client -- or supplier -- requests the payment of a fee which is included in the contract but has not previously been relied on.

Such an issue can prove tricky for the smallest of businesses, whose views on the SBC can be stated in answer to the consultation’s Q20, but the five prioritised for them are:

1. Do you agree with the proposals set out in paragraphs 6.2 - 6.7 for how and when to calculate a business’s staff headcount to determine whether they are a ‘small business’ which can use the Commissioner’s services?

11. If you answered No to Question 10 and think the Regulations should set out specific indicators of behaviour, conduct and practice and for the Commissioner to assess compliance with these, which of the above, or any other, indicators should be included? (Q10: Do you agree that the Regulations should require the Commissioner to take into account the conduct, behaviour and practice of the parties but that examples of these should not be listed in the Regulations, leaving the Commissioner to decide what to include in this consideration?)

12. Do you agree that the Commissioner should consider the relative bargaining position of the parties and the use of that position by the stronger party to the detriment of the weaker party when considering what is fair and reasonable?

16. Do you agree that the Regulations should not list specific types of cases nor therefore corresponding additional factors that the Commissioner must take into account when determining what is fair and reasonable in those specific types of cases?

19. If you disagree that there should be no specified circumstances that give rise to additional factors that the Commissioner must take into account when deciding whether to name a respondent, what should these circumstances be and what factors should the Commissioner consider?

Answers to the questions must reach officials by December 7^th, with the government to publish its response to the consultation within 12 weeks. This timeline indicates that a wish for the commissioner to be installed before 2017 is not going to be granted.