Justice Hugh Small says the slow rate of proceedings in the court system in Jamaica is having a significant negative impact on the small-business sector.

The former finance minister argued Tuesday that alternative arrangements should be put in place for disputes to be resolved outside the courthouse.

Small made the call during the Private Sector Organisation of Jamaica Club Forum, held at the Jamaica Pegasus hotel in New Kingston.

He said that, in a resident magistrate's court, the limit to the amount you can make in claims is $250,000 and that many insurance contract premiums are more than that. This, he noted, poses several challenges for the small-business sector, especially within the time frame.

Four- to five-year wait

Small added that, where a claim of $450,000 or $500,000 is made, the person would have to wait between four and five years and, in one case, one person had to wait seven years for larger commercial claims. However, this was not all fulfilling in the end as, he noted, by the time the battle got to the United Kingdom-based Privy Council, the costs to those making the claim would be very high.

As a result of the tedious proceedings, Small said people in the small-business sector have to make a choice as to whether they should take the $250,000 or take the longer route, which might not be worth it.

"Someone having a claim of $450,000 or $500,000 has to take the hard business decision - 'Do I declare in the resident magistrate's court and abandon the excess and walk away with my $250,000, or do I wait for four to five years when inflation has already savaged the claim and when lawyers' fees have mangled it?'" he said.

Small noted, therefore, that the impact on the small-business sector was far greater than on the larger enterprises and that this was hindering economic progress.

Economy creeping along

"When you deal with these factors you will recognise that it's squeezing the small-business sector and it's not growing. The impact on the entire economy and the larger business sector is there, it's going to be multiplying many times and it's part of the factor that is causing our economy to just keep creeping along at this unsatisfactory rate."

He said the case for establishing an institutional framework for alternative dispute resolution can be made from many perspectives to avoid the ills of the judicial system.

"Where you have this kind of unjust system where people have to make these choices, then it enters the other aspect of our crime portfolio and our ingenuity in terms of enforcement."

The unreliable justice system also encourages extortion and other crimes and there needs to be a system in place to help curb these issues.

"What I'm speaking about is establishing an institutional framework that will allow for the resolution of commercial disputes without having to go to court," he said

Small was quick to point out that private enterprises would have to play a part in the further development of the country.

"Lots of things that can be done and must be done, to lift the country out of its adjustment fatigue of so many years, will depend on private initiatives. But the question is, are we ready?"