The following Commercial practice note provides comprehensive and up to date legal information covering:
The Late Payment of Commercial Debts (Interest) Act 1998 (LPCD(I)A 1998, or the Act) creates rights for businesses (and organisations in the public sector) to claim interest for late payment of commercial debts and recover reasonable debt recovery costs when each party is acting in the course of business. It also enables contractual terms that do not provide a substantial remedy for late payments to be challenged.
This Practice Note covers the following:
Contracts, organisations and debts subject to the LPCD(I)A 1998
Rights under the Act
Calculating the statutory interest
Express terms for late payment in place of statutory interest
Meaning of ‘grossly unfair’
Challenges by representative bodies under the Act
Which version of the legislation applies?
LPCD(I)A 1998 (as it applies in England and Wales) has been implemented in stages via a series of commencement orders which expanded its remit and has been amended by the following statutory instruments:
the Late Payment of Commercial Debts Regulations 2002, SI 2002/1674
the Late Payment of Commercial Debts Regulations 2013, SI 2013/395
the Late Payment of Commercial Debts (No 2) Regulations 2013, SI 2013/908
the Late Payment of Commercial Debts (Amendment) Regulations 2015, SI 2015/1336
the Late Payment of Commercial Debts (Amendment) Regulations 2018, SI 2018/117
For further information, see: Which version of the legislation applies?
The Department for Business Innovation & Skills (BIS) (as it was
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