The Silent Drain on Enterprise: The Economic Impact of Unresolved Commercial Disputes

Every day, countless business-to-business transactions end in disagreement, over payments, delivery, quality, or performance.

For large companies, such disputes are often an inconvenience. For small and medium-sized enterprises (SMEs), they can be existential.

A new Oxera study commissioned by the International Chamber of Commerce (ICC) exposes the staggering economic toll of low-value commercial disputes that remain unresolved, often because the cost of pursuing justice exceeds the value of the claim itself. The result is a hidden but systemic drag on productivity, investment, and growth: a “missing market” for justice that distorts economies worldwide.

Globally, SMEs are estimated to write off more than US$1 trillion every year in bad debts and disputed invoices. In many developing economies, the average cost of court proceedings is higher than the claim value, making enforcement economically irrational. The rational choice, repeated millions of times, is to walk away, eroding trust across markets and suppressing the appetite to invest.

From Business Losses to Macro-Economic Harm

The ICC–Oxera report, published in October 2025, traces how unresolved disputes ripple outward from individual firms to entire economies.

At the firm level, unpaid claims drain liquidity, tie up working capital, and consume valuable management time, time that could fuel innovation or new sales. At the market level, the lack of predictable contract enforcement increases uncertainty, discouraging long-term partnerships and limiting participation in global value chains. At the systemic level, these losses accumulate into a macroeconomic brake on growth: weak enforcement reduces investment, tightens credit, and lowers productivity.

The impact is particularly severe for SMEs in emerging markets, which account for 95% of firms and over half of employment but face prohibitively high legal costs and lengthy proceedings.

In Cambodia, Papua New Guinea, and Timor-Leste, the average cost of enforcing a contract exceeds 100% of the claim value. Globally, the SME financing gap, already estimated at US$5.2 trillion annually, widens further as lenders hesitate to finance firms that cannot reliably enforce contracts.

Justice as Economic Infrastructure

The message from ICC and Oxera is clear: efficient, accessible dispute resolution is not only a legal necessity, it is an economic imperative. Just as ports, energy grids, and digital networks enable trade, a functioning justice system allows firms to enforce agreements quickly and fairly.

Improving access to justice for SMEs unlocks multiple growth dividends:

• Frees capital locked in unpaid invoices and reduces costly litigation;

• Strengthens trust between buyers and suppliers;

• Deepens credit markets by giving lenders confidence that contracts will be honoured;

• Encourages innovation by reducing risk and promoting fair competition.

Accessible dispute resolution is, in short, a form of economic infrastructure, vital for productivity, inclusion, and sustainable growth.

A Digital Pathway Forward

Digital innovation now offers a once-in-a-generation opportunity to democratise access to justice. Online Dispute Resolution (ODR) platforms, using digital workflows, secure document exchange, and virtual mediation, can resolve many commercial disputes at a fraction of the time and cost of court proceedings.

Building on its century-long leadership in commercial standard-setting and access to justice, ICC is developing a global ODR platform designed for micro-, small-, and medium-sized enterprises. By integrating ODR into national legal systems and trade frameworks, governments can create a low-cost, high-trust layer of justice infrastructure, particularly valuable for cross-border transactions and digital trade.

For Europe and the Netherlands, home to strong digital trade ecosystems and forward-looking legal institutions, this presents an opportunity to lead by example, making dispute resolution more efficient, inclusive, and future-proof.

Read further

• Full report: The Economic Impact of Unresolved Low-Value Commercial Disputes (ICC & Oxera, 2025)

• Read the Summary