OCDE - Supporting businesses through better justice systems A focus on SMEs and entrepreneurship

OECD Public Governance Policy Papers No. 79 Supporting businesses through better justice systems A focus on SMEs and entrepreneurship 1

SUPPORTING BUSINESSES THROUGH BETTER JUSTICE SYSTEMS © OECD 2025

OECD Public Governance Policy Papers No. 79

Supporting businesses through better justice systems A focus on SMEs and entrepreneurship

PUBE2 

SUPPORTING BUSINESSES THROUGH BETTER JUSTICE SYSTEMS © OECD 2025

OECD Public Governance Policy Papers This work was approved and declassified by the Public Governance Committee on 19 September 2025 and prepared for publication by the Secretariat. This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

This paper was a uth orised for publication by Elsa Pilichowski , Director, Public Governance Directorate .

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© OECD 2025

Attribution 4.0 International (CC BY 4.0) This work is made available under the Creative Commons Attribution 4.0 International licence. By using this work, you accept to be

Photo credits: Cover © Gorodenkoff /Shutterstock.com.

© OECD 2025

Attribution 4.0 International (CC BY 4.0) This work is made available under the Creative Commons Attribution 4.0 International licence. By using this work, you accept to be bound by the terms of this licence ( https://creativecommons.o rg/licenses/by/4.0/ ). Attribution – you must cite the work. Translations – you must cite the original work, identify changes to the original and add the following text: In the event of any discrepancy between the original work and the translation, only the text of original work should be considered valid. Adaptations – you must cite the original work and add the following text: This is an adaptation of an original work by the OECD. The opinions expressed and arguments employed in this a daptation should not be reported as representing the official views of the OECD or of its Member countries. Third-party material – the licence does not apply to third - party material in the work. If using such material, you are responsible for obtaining per mission from the third party and for any claims of infringement. You must not use the OECD logo, visual identity or cover image without express permission or suggest the OECD endorses your use of the work. Any dispute arising under this licence shall be se ttled by arbitration in accordance with the Permanent Court of Arbitration (PCA) Arbitration Rules 2012. The seat of arbitration shall be Paris (France). The number of arbitrators shall be one. 3

SUPPORTING BUSINESSES THROUGH BETTER JUSTICE SYSTEMS © OECD 2025

Abstract Small and medium -sized enterprises (SMEs) often face costly, complex, and time -consuming legal disputes that can result in financial losses, customer attrition, or even business closure. Such challenges not only hurt individual firms but can also undermine broader economic growth and investment. SMEs typically lack the legal resources and protections available to larger firms or consumers, making access to

disputes that can result in financial losses, customer attrition, or even business closure. Such challenges not only hurt individual firms but can also undermine broader economic growth and investment. SMEs typically lack the legal resources and protections available to larger firms or consumers, making access to affordable and timely justice essential. As SMEs navigate global crises and elevated uncertainty, improved access to justice is critical for resilience an d growth. Alternatives to litigation – such as online dispute resolution (ODR), negotiation, mediation, and arbitration – offer more efficient ways to resolve conflicts. Technology and digitalisation can support fairer, quicker outcomes. This paper outlines key principles and international best practices for enhancing SME access to justice, including recommendations for responsive legal services and a proposed Code of Dispute Resolution for Businesses to ensure consistent, equitable conflict resolution for both companies and citizens.4 

SUPPORTING BUSINESSES THROUGH BETTER JUSTICE SYSTEMS © OECD 2025

Acknowledgements This paper was produced by the Public Governance Directorate (GOV) of the OECD under the leadership of Elsa Pilichowski, Director for Public Governance and the overall supervision of Tatyana Teplova, Head of Division and Senior Justice Counsellor in GOV. The principal authors of this Policy Report are Prof. Felix Steffek and Dr. Holli Sargeant of the Law Faculty at the University of Cambridge. Policy analysts Ch loé Lelievre, María Pascual , Nizar Touhami -Chahdi, Martyna Wanat, Salma Farghali as well as Melissa Sander, Ciara Muller and Andrea Urhhammer provided co-ordination and editorial support. Valuable review and comments were received from Gillian Dorner, Deputy Director, Public Governance Directorate, the OECD Regulatory Policy Division as well as the Innovative, Digital and Open Governance Division in the Public Governance Directorate, the Entrepreneurship, SME and Tourism Division within the Centre for Entrepreneurship, SMEs, Regions and Cities and the Competition Division in the Directorate for Financial Affairs. The OECD is grateful to the Department of Justice of Canada, the Ministry of Justice of France and the

Entrepreneurship, SME and Tourism Division within the Centre for Entrepreneurship, SMEs, Regions and Cities and the Competition Division in the Directorate for Financial Affairs. The OECD is grateful to the Department of Justice of Canada, the Ministry of Justice of France and the European Union for sharing their experience and insights to inform the paper. 5

SUPPORTING BUSINESSES THROUGH BETTER JUSTICE SYSTEMS © OECD 2025

Table of contents OECD Public Governance Policy Papers 2 Abstract 3 Acknowledgements 4 Executive summary 6 1 Better justice for businesses - overview 8 2 Legal and justice needs of businesses 10 3 Principles to support businesses through better justice systems 17 4 Policy framework to support businesses through responsive justice systems 22 5 Conclusion 35 Annex A. Country good practices 36 References 42

Figures Figure 2.1. Main barriers to accessing the services of the Latvian Enterprise Registry in Latvia 11 Figure 2.2. Most significant barriers faced by Latvian businesses in resolving legal problems 12 Figure 4.1. Providing information for business by lifecycle events 256 

SUPPORTING BUSINESSES THROUGH BETTER JUSTICE SYSTEMS © OECD 2025

Executive summary Access to justice is fundamental for economic growth and good governance. This report highlights the legal and justice challenges faced by small and medium -sized enterprises (SMEs) and entrepreneurs – the lifeblood of OECD economies – proposing policy recommendations to enhance their access to justice. Given that SMEs represent 99% of all firms in OECD countries and contribute significantly to employment and economic activity, ensuring a fair, efficient, and accessible justice system is vital for their sustainability. A responsive justice system is essential for businesses to thrive, yet SMEs face systemic disadvantages that hinder their ability to resolve legal disputes efficiently. Unlike larger firms, SMEs often lack the financial and legal resources necessary to navigate complex legal systems. High litigation costs, lengthy court proceedings, and regulatory burdens disproportionately affect smaller businesses, mak ing it difficult for

that hinder their ability to resolve legal disputes efficiently. Unlike larger firms, SMEs often lack the financial and legal resources necessary to navigate complex legal systems. High litigation costs, lengthy court proceedings, and regulatory burdens disproportionately affect smaller businesses, mak ing it difficult for them to enforce contracts, resolve disputes, and protect their intellectual property. The consequences of unmet legal needs extend beyond individual businesses, affecting economic growth and market stability. When SMEs are unable to resolve legal disputes efficiently, they face financial losses, disruptions to their supply chain, and damage to their relationships with customers and business partners. In severe cases, unresolved legal problems can lead to business closures, reducing ove rall market competitiveness and discouraging investment. OECD research highlights that SMEs are particularly vulnerable during periods of economic crisis. The COVID -19 pandemic, geopolitical conflicts, and inflationary pressures have made it even more diff icult for SMEs to access legal recourse. This lack of access to justice undermines overall economic stability, hampers inclusive growth, and limits the innovation potential of SMEs. Many OECD countries have justice systems that are designed for larger firms or private individuals, making them ill -suited to SMEs ’ unique needs. Court systems are often slow and expensive, and alternative mechanisms such as mediation, arbitration, or online dispute resolution (ODR), which are faster and less expensive, are not widely adopted by SMEs due to lack of awareness or access. Legal needs surveys conducted in OECD countries highlight that poor information availability, administrative complexity, and high costs prevent SMEs from effectively using legal services and dispute resolution systems. These barriers make SMEs less likely to pursue legal action, forcing them into suboptimal and informal resolution methods. The underutilisation of digital legal services further limits access to justice, particularly for microenterprises and businesses in emerging industries. Countries and their institutions have not yet fully integrated digital tools into legal and dispute resolution systems, resulting in fragmented and inefficient processes. Moreover, disparities persist in legal access across different SME sectors, with women-led businesses and start-ups facing even greater obstacles. The OECD advocates for a user-centric approach to justice, ensuring that legal and dispute resolution

tools into legal and dispute resolution systems, resulting in fragmented and inefficient processes. Moreover, disparities persist in legal access across different SME sectors, with women-led businesses and start-ups facing even greater obstacles. The OECD advocates for a user-centric approach to justice, ensuring that legal and dispute resolution services are designed around the needs of SMEs as regular users of justice services, rather than the institutions that provide them. Designing legal frameworks that reflect SMEs' cons traints and realities and that offer clear, simple guidance and access to affordable dispute resolution mechanisms would make justice more accessible, responsive, and effective. A Code of Dispute Resolution for Businesses could 7

SUPPORTING BUSINESSES THROUGH BETTER JUSTICE SYSTEMS © OECD 2025

help establish clear, fair, and standardised legal principles that benefit SMEs. Ensuring that legal services are designed from the perspective of SMEs, rather than requiring SMEs to navigate complex systems meant for larger corporations, is essential to closing the justice gap. Expanding alternative dispute resolution (ADR) mechanisms such as mediation, arbitration, and ODR is essential for reducing the burden on traditional courts and making justice more accessible to SMEs. Countries could actively promote ADR and ODR through awareness campaigns, regulatory proposals, and the integration of digital dispute resolution platforms into public and private legal services. Countries like Singapore have successfully implemented integrated ODR platforms, offering a model for how technology can improve access to justice. Similar initiatives could be expanded across OECD jurisdictions, ensuring that SMEs can resolve disputes quickly and cost-effectively. Actively simplifying business -related legal procedures, reducing administrative burdens and costs, and introducing SME-focused legal aid program mes would lower the cost of accessing justice. Applying the user-centric approach, countries must ensure that legal regulations are designed to be intuitive, practical, and proportionate to SMEs’ needs. Investing in digital legal services and infrastructure would facilitate faster and more efficient dispute resolution. A user-centric approach to digital justice would ensure that technology is used to simplify legal services, rather than creating additiona l barriers. This means designing digital solutions and legal

and proportionate to SMEs’ needs. Investing in digital legal services and infrastructure would facilitate faster and more efficient dispute resolution. A user-centric approach to digital justice would ensure that technology is used to simplify legal services, rather than creating additiona l barriers. This means designing digital solutions and legal information portals that are user-friendly and integrated into SMEs’ existing business operations. Solutions such as resolving disputes through digital platforms, e -residency programmes, digital business registries, and automated compliance tools make legal processes more efficient for SMEs. Finally, policymakers must ensure that justice reforms respond to needs of different groups of businesses, particularly SMEs. Moreover, many women-owned, start-ups, and microenterprises face additional barriers in accessing justice. Legal support programmes could target these vulnerable SMEs, ensuring they receive tailored resources, legal protections, and specialised dispute resolution assistance. The “Think Small First” principle, for example, could guide regulatory decision making, ensuring that SMEs are not disproportionately burdened by laws originally designed for larger corporations. Legal and regulatory reforms could be evaluated through an SME lens, ens uring that policies do not unintentionally disadvantage smaller businesses. Public -private partnerships could facilitate outreach, ensuring that all SMEs—regardless of size or background—have access to affordable legal services. By implementing these refor ms, policymakers can create justice systems that are more accessible and efficient for businesses, enabling SMEs to resolve disputes swiftly, protect their interests, and contribute more effectively to economic growth and innovation. The recommendations ou tlined in this report provide a roadmap for ensuring that SMEs are no longer disadvantaged in legal matters, ultimately fostering a more resilient, inclusive, and dynamic business environment.8 

SUPPORTING BUSINESSES THROUGH BETTER JUSTICE SYSTEMS © OECD 2025

Setting the scene A responsive justice system is essential for economic growth and good governance. Ensuring access to justice requires a bottom-up approach that focuses on the needs of the individuals and organisations that rely on justice systems (OECD/Open Society Foundations, 2019[1]).1 The OECD defines

Setting the scene A responsive justice system is essential for economic growth and good governance. Ensuring access to justice requires a bottom-up approach that focuses on the needs of the individuals and organisations that rely on justice systems (OECD/Open Society Foundations, 2019[1]).1 The OECD defines access to justice as the ability of people, businesses , and communities to prevent conflicts and obtain effective, fair, equitable , and timely resolution of their legal and justice -related needs (OECD, 2023[2]). It applies both in commercial and non-commercial contexts. The scope of this document covers all types of businesses. However, particular consideration is given to the specific circumstances and needs of small and medium -sized enterprises (SMEs) and entrepreneurs, which i n OECD countries represent approximately 99% of all firms (OECD, 2017 [3]; OECD, 2021 [4]),2 particularly in the delivery of legal services and dispute resolution services (OECD, 2019[5]).3 For SMEs and start-ups, accessible and well-functioning justice services including land and commercial registers are essential to guarantee a level playing field for all firms. At the same time – due to their smaller size and relative lack of experience as young firms – such businesses may lack the capacity to access these services to the same extent as larger entities. The interests of businesses in general and SMEs in particular serve as the basis for evaluating legal and regulatory frameworks and related procedures. Many OECD countries are looking more closely at the legal and justice needs o f businesses to boost the wider business environment. Traditionally, the focus has been on institutional performance by the justice system. However, it is important to consider the types of challenges businesses face, the effectiveness of current systems, and what works for whom and for what types of legal and justice needs. It is also important to acknowledge tensions in designing effective systems involving government, private and commercial entities, and that trade -offs may need to be made to achieve eff iciency, equity, and quality. It is vital for any system to reflect the needs of specific types of businesses to ensure better access to justice.

to acknowledge tensions in designing effective systems involving government, private and commercial entities, and that trade -offs may need to be made to achieve eff iciency, equity, and quality. It is vital for any system to reflect the needs of specific types of businesses to ensure better access to justice. SMEs are exposed to the impacts of economic shocks in the global economy. In recent years, events such as the COVID-19 pandemic and geopolitical tensions, have put many of them in jeopardy. The pandemic directly affected business operations where many have struggled financially or even ceased trading (OECD, 2020[6]). SMEs are now cop ing with further macroeconomic upheavals, such as high inflation, tightening financial conditions, reduced monetary and fiscal support, supply -chain disruptions, increased energy prices (OECD, 2023 [7]; OECD, 2024[8]). Emerging evidence points to slowing firm entry growth, raising market exits and increasing bankruptcy rates (OECD, 2023 [7]). All these marks of elevated uncertainty have increased unmet and unresolved legal needs for SMEs and raised barriers to access justice. SMEs and entrepreneurs are the lifeblood of OECD economies. They are often the primary source of private sector employment and value creation (OECD, 2021 [9]). They are a major engine of a nation’s 1 Better justice for businessesoverview 9

SUPPORTING BUSINESSES THROUGH BETTER JUSTICE SYSTEMS © OECD 2025

economy, employment level and economic growth. SMEs account for 60% -75% of total employment, depending on the sector, and generate, on average, 50% to 60% of value -added (OECD, 2017[3]; OECD, 2023[10]). SMEs and entrepreneurs also play an essential role in driving innovation, the development of new markets and responding to social needs, including by providing opportunities for upward mobility for women and men of all ag es and backgrounds. SMEs are also catalysts for globalisation, labour market transformations and the transition to digital and green economies (OECD, 2021[11]). Responsive justice is

new markets and responding to social needs, including by providing opportunities for upward mobility for women and men of all ag es and backgrounds. SMEs are also catalysts for globalisation, labour market transformations and the transition to digital and green economies (OECD, 2021[11]). Responsive justice is also important for democratic resil ience. In times of crisis, functioning justice systems are essential for maintaining the rule of law upon which societies, including businesses and SMEs, rely. Access to justice is often focused on private individuals who generally have fewer resources and less experience of the legal system than businesses. The law also offers more protection to private individuals and consumers. SMEs are in a particular category; like private individuals, they often have less experience and fewer resources. However, additional protection is often not available for them. SMEs and start-ups may avoid or struggle to engage with the traditional justice system for several reasons. These are explored in this report. Helping SMEs to overcome these challenges will help to foster g ood governance, legal certainty and predictability, which will, in turn, enhance a supportive business environment and sound economic growth (OECD, 2019[5]). Structure of the paper Section 2 maps the legal and justice needs of businesses regarding their business operations and dispute management, building on the OECD work in Latvia. It explores what these needs are for SMEs in particular and highlights the impacts of unmet and unresolved justice needs. Based on these needs, Section 3 introduces general principles for supporting businesses through enhanced access to justice in four key areas: (1) essential elements of justice for businesses; (2) justice for businesses and society; (3) justice for businesses and innovation; (4) specific perspectives on justice for businesses. These principles guide the specific recommendations set out in the following section. In Section 4, specific framework recommendations are proposed for designing and deliv ering business and people-centred legal and justice services. The recommendations include: (1) design features applying to both legal services and dispute resolution services; and specific recommendations concerning (2) legal services and (3) dispute resolution services. Examples of best practice have been identified from relevant

and people-centred legal and justice services. The recommendations include: (1) design features applying to both legal services and dispute resolution services; and specific recommendations concerning (2) legal services and (3) dispute resolution services. Examples of best practice have been identified from relevant OECD reports, roundtables, and country studies to provide illustrations of the strategies identified. The brief concludes by consolidating the findings of this paper and indicating future developments.10 

SUPPORTING BUSINESSES THROUGH BETTER JUSTICE SYSTEMS © OECD 2025

Legal services for business operations Businesses, regardless of size or industry, share core operational needs, including governance, finance, production, and external relationships (Faure, 2019[12]). Their organisational structure dictates how they are founded and may eventually close. Structures range from sole proprietorships to partnerships and corporations, with countries’ commercial laws governing their formation, governance, and dissolution (OECD, 2018[13]). Governance needs vary; some businesses benefit from strong directors, while others require more owner input (Goshen and Squire, 2017 [14]). The right structure balances the interests of owners, man agers, and employees and ensures compliance with corporate regulations. To set up a business, people will engage with commercial registers, other government and administrative processes, and legal services to comply with corporate compliance and transparency obligations. Legal services play a crucial role in promoting good governance, transparency, and accountability, which foster long-term investment, financial stability, and business integrity. Well -governed businesses tend to perform better and contrib ute to efficient financial markets (Deloitte and Nyenrode Business Universiteit, 2016[15]; Maher and Andersson, 2000[16]).4 Governments provide essential legal frameworks and services to support these outcomes, thereby playing an important role in upholding the rule of law. Businesses also require appropriate financing for creation, survival, and growth. Funding varies by structure, governance model, and firm size (OECD, 2024[8]).5 Legal obligations arise in dealings with government agencies and services, banks, and investors, including institutional financiers like investment

Businesses also require appropriate financing for creation, survival, and growth. Funding varies by structure, governance model, and firm size (OECD, 2024[8]).5 Legal obligations arise in dealings with government agencies and services, banks, and investors, including institutional financiers like investment banks and mutual funds, another essential external relationship and source of finance. Production, whether of goods, services, or technology, is understood in this report as relying on relationships with suppliers, clients, and consumers, which require contracts between suppliers and clients. These external relationships require various forms o f legal services. Legal services ensure contracts are enforceable and protect business interests through commercial, property, and intellectual property registers. Governments facilitate these functions by maintaining essential registries and legal frameworks. Legal needs also shape cooperative relationships, from forming partnerships and executing contracts to enforcing agreements. When legal needs are unmet, businesses face inefficiencies, threatening both their viability and broader economic stability. 2 Legal and justice needs of businesses 11

SUPPORTING BUSINESSES THROUGH BETTER JUSTICE SYSTEMS © OECD 2025

Figure 2.1. Main barriers to accessing the services of the Latvian Enterprise Registry in Latvia

Note: Based on 102 replies from 50 businesses.

Source: (OECD, 2018[13]).

Dispute resolution Disputes in business may arise at various points, including for example, in using the legal services mentioned above. Businesses may encounter disputes with the following parties (OECD, 2019[17]; OECD, 2019[18]): • Other businesses: conflicts over performance or payments in contracts or breaches of other liabilities with commercial suppliers and other business partners. This category also concerns relations with vital service providers, such as telecommunications and energy. • Commercial clients and consumers: conflicts regarding contractual obligations with clients or customers, enforcing performance, in particular payment, or resolving issues under consumer protection laws. • Employees: concerning remuneration and other benefits, recr uitment, human resources complaints, termination of employment contracts. In some cases, employee disputes may be

customers, enforcing performance, in particular payment, or resolving issues under consumer protection laws. • Employees: concerning remuneration and other benefits, recr uitment, human resources complaints, termination of employment contracts. In some cases, employee disputes may be spurious or vexatious, causing significant reputational damage and materially affecting the culture of a business. • Financial institutions: including conflicts over debt finance from banks or with institutional investors. Disputes with financial services are complicated for businesses to navigate and may be exceptionally disruptive to what should be a reliable, ongoing relationship. • State institutions: various types of government-regulated requirements or processes. For example, these disputes may be about the (non)-issuing of permits or non-registration necessary for getting started or about taxation matters. Businesses also need to manage pote ntial conflicts within their various internal relationships (OECD, 2017[3]). These internal relationships will vary between different business structures. Some enterprises have hierarchical internal relationships, whereas smaller businesses tend to have less hierarchy between managers and employees. These relationships intersect with legal services at various points, from corporate governance compliance to employment law obligations. Common justice and dispute resolution needs in business activities, including disputes with customers, suppliers, employees, and government, as well as challenges in accessing justice services due to unclear information, inefficiencies, high costs, and lack of quality processes, are important considerations ( see 1, Annex A).12 

SUPPORTING BUSINESSES THROUGH BETTER JUSTICE SYSTEMS © OECD 2025

Figure 2.2. Most significant barriers faced by Latvian businesses in resolving legal problems

Note: Based on 96 replies from 34 businesses.

Source: (OECD, 2018[13]).

Legal and justice needs of SMEs Businesses generally have more resources than private individuals. They also tend to have more experience in assessing options and negotiating with others. 6 Therefore, the law generally extends less protection to businesse s than to private individuals. However, in terms of legal and justice needs SMEs

Legal and justice needs of SMEs Businesses generally have more resources than private individuals. They also tend to have more experience in assessing options and negotiating with others. 6 Therefore, the law generally extends less protection to businesse s than to private individuals. However, in terms of legal and justice needs SMEs often have more in common with private individuals, such as consumers, than with larger businesses. Often, SMEs and start-ups do not have the capabilities and resources of larger firms. In addition, the law does not always reflect this reality. Young and small firms are more vulnerable to market imperfections linked to market entry and exit. They tend to have less access to resources, including skills, finance, knowledge networks or innovation assets. In some cases, as outlined in this report, this hampers the ability of SMEs to pursue justice services. On the one hand, there is no level playing field between SMEs and larger enterprises. On the other hand, smal