More reason to claim late payment interest

Posted: Wednesday, 10 April 2013 @ 10:58

Since I last blogged on the subject in November 2012 (click here to see it), there have been some changes which came into effect on 16 March 2013. The Late Payment of Commercial Debts Regulations 2013 only apply to contracts entered into on or after 16 March.

You may recall that if there is no contract credit period for payment, and no convention such as 30 or 60 days has been established, then the default period is 30 days. Because many contracts provide for longer periods for payment, and purchasers of goods or services have an unequal bargaining power, a cap has been introduced for contract terms. The maximum period for payment by local authorities will now be 30 days For all other cases the maximum contract period for payment will be 60 days, unless any later date is not “grossly unfair” to the supplier.

Another new provision is to recognise that in some contracts there is a procedure for acceptance or verification. Provided the purchaser has notice of the amount of the debt by the time the procedure is completed, time will only start to run from when the procedure is completed, and up to 30 days is allowed for the acceptance period. It can be a longer period if the parties agree and it is not “grossly unfair” to the supplier.

“grossly unfair” is defined as anything which is a gross deviation from good commercial practice and contrary to good faith and fair dealing.

Another change is the right to claim the costs of recovering the late payment interest. Previously a fixed sum was provided to cover costs. Now, if the fixed sum does not cover the reasonable costs of the supplier, the difference can be claimed. So there is yet more reason to make sure that you take advantage of these rights and claim from late payers.


Nigel Musgrove
Business and Litigation Solicitor
Tel: 0845 003 5639


Blog by Nigel Musgrove
Nigel has been providing dispute resolution advice as a solicitor for over 35 years. As well as advising SMEs and business owners on disputes he also offers a specialist licensing law service. View profile
Call Nigel on +44 (0)1285 847 001 or by email
This blog is not intended to constitute legal advice, nor is it intended to be a complete and authoritative statement of the law, and what we say might be out of date by the time you read it. You should always seek legal advice to confirm whether or how any information in this article applies to your particular situation. We offer a free telephone consultation to discuss your particular circumstances.

Comments

  • There are no comments for this page - click here to be the first

Need legal advice for your business? We can help

Directors

Directors
Practical advice and legal support for company owners and directors.

Disputes

Disputes
In dispute with a customer or supplier? Get practical advice and support.

Your legal advisor

Your legal advisor
Board level legal advice without the costs of an in-house lawyer.

Speak to a lawyer

Speak to a lawyer
Cousins Business Law excels at demystifying potentially complex legal areas for small business owners
Simon Moore, MD Moore News Ltd

Get legal updates

Enter your email address to receive our monthly Blog Newsletter


We will keep your email safe in accordance with our privacy policy.

Get the FREE definitive guide to solving business disputes

Speak to a lawyer

Get legal updates

Enter your email address to receive our monthly Blog Newsletter
The Law Society
Top