Introduction

The Small Claims Court in Kenya was established with the primary goal of offering a streamlined and efficient platform for resolving minor civil disputes involving small monetary claims. While the court is accessible to both individuals and businesses alike, it is evident that the system is better equipped to assist businesses and companies than individuals. This article explores the reasons behind this assertion, shedding light on the challenges individuals face in executing judgments compared to their business counterparts.

1. Expedited Resolution for Businesses

The Small Claims Court in Kenya aims to provide a swift resolution to disputes, which is especially advantageous for businesses. In the corporate world, time is of the essence, and protracted legal battles can severely impede operations and financial stability. With this court's accelerated procedures, businesses can resolve disputes efficiently and focus on their core activities.

On the other hand, individuals may not always face the same urgency to resolve minor disputes, leading to potential delays in seeking justice through the Small Claims Court. This discrepancy in urgency highlights the court's inherent bias towards businesses.

2. Financial Resources

Businesses typically have better financial resources and access to legal representation, enabling them to navigate the legal process more effectively. They can afford to hire competent lawyers to present their case and collect evidence promptly. Law firms such as W.J. Maxwell & Associates Advocates provide general counsel services for small and medium-sized businesses such as defending the business's interests, recovering funds and properties for them, buying properties, drafting contracts with customers, suppliers, and creditors, and other legal tussles.

Additionally, businesses often maintain better records and documentation, which can bolster their claims in court.

In contrast, individuals may not have the financial means to engage legal counsel, potentially putting them at a disadvantage during the legal proceedings. Moreover, they might lack the resources to gather sufficient evidence to support their claims effectively.

3. Execution of Judgments

One of the most critical aspects of any court system is the enforcement of judgments. This is where the Small Claims Court's favoritism towards businesses becomes evident. Once a judgment is made against a business, the chances of successfully executing the judgment are significantly higher compared to the execution against an individual.

Businesses generally have assets, financial stability, a permanent physical address and a reputation to protect. As a result, they are more likely to comply with court orders promptly. In contrast, individuals may lack tangible assets or sufficient income to satisfy the judgment. As such, enforcing a judgment against an individual can be a cumbersome and time-consuming process.

4. Business Growth and Development

The ease of utilizing the Small Claims Court can promote business growth and development. By providing a reliable mechanism to resolve disputes, businesses can operate with greater confidence, knowing that they have a legal recourse if disagreements arise. This sense of security can incentivize entrepreneurs and investors to start and expand businesses in Kenya, fostering economic growth.

Conclusion

Small and medium enterprises (SMEs) often face challenges when it comes to securing timely payments from customers, vendors, creditors and suppliers. This predicament can severely affect their financial stability, hindering growth and sustainability. Nearly half of the businesses in Kenya do not see their first birthday. To address these issues and provide a swift resolution, the Government established the Small Claims Court to serve as a formidable instrument for SMEs, ensuring they receive payments promptly, customers and suppliers deliver on time, and invoices are honoured without unnecessary delays. The court's streamlined processes, preference for expedited resolutions, and the relative ease of executing judgments make it a more effective tool for businesses.

[*This article generally explains the law in force in Kenya and does not constitute an opinion or a legal opinion. To find out the rules specific to your situation, write to us at info@wjmaxwell.co.ke or Call/WhatsApp on 0733 610 961]