Media
Compensation for late payment
In tough times, many businesses face difficulties in having their customers pay within a reasonable time.
The Litigation Team at Raeburn Christie Clark & Wallace have extensive experience chasing and recovering bad debt for our commercial clients; often making full recoveries without having to resort to court action.
An often overlooked tool is the Late Payment of Commercial Debts (Interest) Act 1998, which has been in force since 2013. The Act provides that in certain circumstances, penalty payments may be recovered from debtors, in addition to the original debt.
Can I recover?
Upon instruction, our Litigation Team will identify whether your debt is a ‘qualifying debt’ in terms of the Act. Only those debts involving the supply of goods or services, where the purchaser and the supplier are each acting in the course of business, qualify for the additional payments.
What can I recover?
If our Litigation Team identifies that your debt is a ‘qualifying debt’, they will then calculate what you are entitled to recover before sending a demand letter to the debtor. This may include:
- Statutory Interest of 8% above the Bank of England Base Rate, often running from 30 days after the invoice has been issued; and
- A compensation payment varying from £40 to £100 for each debt not paid.
The purpose of the Act is to compensate those suffering from late payment of debts and to deter late payment going forward. As you can imagine, if you are seeking payment of large and/or multiple invoices, the additional sums sought under the Act can be significant.
Whether or not your debt qualifies in terms of the Act, our Litigation Department will strive to recover all that you are entitled to. Should you like more information on our debt recovery services, please do not hesitate to contact our Litigation Department on 01224 332400. We will always aim to provide clear and understandable advice, taking account of the economic factors and risks involved in any litigation. Find out more about your key contact, Aaron Doran, here.
