As part of its package of measures to combat late payment, the government introduced the Late Payment of Commercial Debts (Interest) Act 1998, which gave small firms with 50 or less employees a statutory right to interest for the late payment of commercial debts. This statutory right to interest and other new entitlements have been available to all businesses and public sector bodies since 7 August 2002.
A guidance booklet, A User's Guide to Late Payment Legislation can be downloaded here (13 pages). Alternatively copies can be ordered from the Publications Orderline by calling 0870 1502 500, quoting URN 02/883.A user's guide to late payment legislation
The late payment legislation does not prevent businesses from setting, and agreeing with customers, their own terms of business including the level of interest to be charged on late payment.
Where payment is proving difficult or the other party disputes the amount due, we recommend that businesses obtain legal advice. This does not necessarily mean going to court. The Department for Constitutional Affairs publication 'Resolving Disputes Without Going to Court' sets out the options available. This can be obtained from county courts, public libraries or your local Business Link.
Leaflets providing guidance on all aspects of recovering debts through the courts are available from the Court Service or from county courts.
The Law Society operates the Lawyers For Your Business scheme, offering a free consultation with a solicitor. Details of the scheme and the 1,700 legal practices involved in this scheme nationwide area available from the Law Society website.