The Small Business Comissioner

Introduction

This guide provides a comprehensive overview to help you understand the Small Business Commissioner's role, the support available to small businesses, and the ultimate goals of the policy.

1. What Is The Small Business Commissioner And How Did It Come About?

Small businesses often face challenges due to an imbalance of power when dealing with larger companies, which can make them feel unable to challenge unfair contract terms for fear of losing important business relationships. These issues can hinder growth and put small businesses at risk. To address these concerns, the government established the Small Business Commissioner through the Enterprise Act of 2016. The Commissioner's role is to help small businesses resolve payment disputes, prevent conflicts, and encourage a positive culture change in how businesses interact with each other.

2. Main Functions Of The Commissioner

The primary functions of the Small Business Commissioner, as set out under the relevant legislation, are as follows:

• Provision of Advice and Information: To offer and publish general advice and guidance on matters relating to dispute resolution and contractual principles. This includes outlining available mechanisms for resolving commercial disputes.
• Referral to Appropriate Services: To signpost small businesses to suitable support services, including relevant sector-specific ombudsmen, regulatory bodies, or accredited alternative dispute resolution (ADR) providers.
• Complaints Handling Function: To operate an internal complaints-handling mechanism specifically aimed at addressing issues concerning late or unfair payments.

The enabling legislation also supports a formal complaint-handling procedure via the Small Business Commissioner’s complaints scheme. This mechanism promotes transparency in payment practices and encourages accountability across both small and large businesses.

3. The Complaints Handling Scheme

The figure below shows the customer journey:

A complaint can be made in relation to:

• A request or other act, or a failure to pay or other omission, in relation to a payment for or in connection to supply of goods or services
• In connection with the relationship or possible relationship between the small business and the larger business so far as relevant to the supply

The complaint procedure is outlined below

Note: The parties are not under a legal obligation to follow any of the Commissioner’s recommendations.

4. Out Of Scope Complaints

Construction contracts that fall within the scope of the Housing Grants, Construction and Regeneration Act 1996 (commonly referred to as the Construction Act) are considered out of scope for the Small Business Commissioner. This is because such contracts provide parties with a statutory right to adjudication as a dispute resolution mechanism. Accordingly, complaints arising under these contracts do not fall within the Commissioner’s jurisdiction. (See separate guidance for further detail on the Construction Act and adjudication).

5. Who Is Eligible To Use The Scheme?

The scheme is available to the following categories of applicants:

• Small businesses, defined as those with fewer than 50 employees.
• Companies and unincorporated associations.
• Partnerships and limited liability partnerships (LLPs).
• Directors and other relevant office holders acting on behalf of eligible businesses.

Excluded from the scheme are:

• Public authorities.
• Self-employed individuals operating as sole traders.
• Apprentices.

6. Time Limits

The reporting period under the scheme is 12 months. The Small Business Commissioner may impose a time limit for a party to provide requested information. This deadline may be extended at the Commissioner’s discretion in certain circumstances, as specified in the relevant Scheme Regulations.

7. Form Of Complaints

To be accepted under the scheme, a complaint must be submitted in writing, either online or by email/post. Complaints cannot be made by telephone, as a written record is required for transparency and audit purposes.

A valid complaint must include the following:

• Key dates and a clear description of the issue, to allow the Commissioner to assess whether the complaint falls within the scope of the scheme.
• Confirmation from the complainant that they have already raised the issue with the respondent and allowed a reasonable opportunity for the matter to be resolved.
• A written explanation of the reasons for the complaint, setting out the nature and context of the dispute.

If the complainant seeks an extension of time to submit the complaint, they must provide written reasons justifying the request.

8. Can The Comissioner Dismiss A Complaint?

Yes. The Small Business Commissioner may dismiss a complaint where any of the following circumstances apply:

• The complaint is frivolous or vexatious in nature.
• The matter is more appropriately dealt with by another forum, such as the courts, an ombudsman, or a regulatory body.
• The issue has not resulted in any financial loss, material distress, material inconvenience, or other significant adverse effect to the complainant.
• The complaint has already been adequately remedied.
• The complainant is seeking an outcome that the Commissioner has no legal authority to grant, beyond making a non-binding recommendation.
• The matter is currently the subject of, or has already been determined through, legal or adjudication proceedings.
• The matter has previously been considered and concluded by a court or adjudicator.

9. Small Business Commissioner In Australia

In 2003, the state of Victoria, Australia, established an independent body known as the Victorian Small Business Commissioner (VSBC), through the enactment of the Small Business Commissioner Act 2003 (Vic). The initiative was designed to support small businesses by providing guidance and assistance in resolving commercial disputes and avoiding costly litigation.

The VSBC's approach emphasises efficiency and cost-effectiveness. Statistics indicate that over half of all disputes handled under the scheme are resolved at 30% or less of the cost of traditional litigation. In terms of timeliness, more than 50% of complaints are resolved within one week, and approximately 80% are concluded within 12 weeks.

To improve accessibility and engagement, the VSBC also maintains an active presence through digital platforms, including a Facebook page and a regular newsletter providing updates and guidance for small businesses.

More about Victorian Scheme in Australia can be found here.

Please note: this factsheet was last updated in June 2025, is aimed for general information purposes only and does not constitute legal or other professional advice. The information is considered to be correct at the date of publication however any changes and further developments may impact the accuracy and validity of the information provided here. For further advice or assistance with a contract review please contact Legal & Commercial team on legal@thebesa.com.