Total annual losses to small businesses from legal problems are estimated at £40 billion, with over one million individuals in small businesses suffering ill-health as a result. It is hoped that some of the 350,000 SMEs in Scotland will see this as a cost-effective way of pursuing claims.

Under a “Success Fee Arrangement” businesses with valid claims will be able to pursue them without incurring ongoing legal costs, only paying a pre-agreed Success Fee if they win.

Morton Fraser has introduced the service following a change in Scottish legislation which allows this new type of fee agreement. While the change in legislation took place in April 2020, the pandemic has heightened the potential benefit to SMEs of these agreements, as commercial contracts have been placed under significant stress due to coronavirus-related disruptions.

Chris Harte, chief executive at Morton Fraser, said: “The financial risks associated with commercial disputes can prevent many businesses from pursuing them, but this helps level the playing field.

“The new legislation was designed to help businesses seek recourse where it is due, by making litigation more accessible to the whole business community. After such a tough year for many companies, Success Fee Arrangements are likely to be a welcome development for many. 

“We see this as the future of commercial litigation. Many small businesses don’t necessarily see lawyers as being a cost-effective solution to resolve legal issues and we hope to change that perception through this service.”