Struggling SMEs could face commercial litigation

Published on 9 Aug 2010 under category: legal

More small manufacturers could face litigation if product demand weakens in the coming quarter.
The Confederation of British Industry (CBI) has revealed in its latest quarterly report that a fifth of small UK firms reported falling output.
Almost a quarter (24 per cent) of companies claimed to see a drop in new orders.
This could mean that more firms will struggle financially and find themselves embroiled in commercial litigation.
According to the survey, companies were planning to spend less on product and process innovation, plants and machinery and buildings.
It is possible this could further impact on revenues for many firms left unable to expand.
Chairman of the CBI's SME council Russel Griggs said that the outlook was shaky for many companies in the next three months.
"Exports are leading the charge, reflecting the pick-up in global trade and the relative weakness of sterling, but firms are still seeing their profit margins squeezed because of rising costs.
"Looking ahead, firms do not expect such strong growth to be sustained into the coming quarter. Output is expected to dip slightly as demand looks set to weaken."

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