Small business commissioner must help small firms lay down the law on late payment
“A mediation service will only support a fraction of the small businesses struggling with late payment”, says Charles Wilson, Chairman of Lovetts, the debt recovery law firm. “The Small Business Commissioner should focus instead on helping businesses lay down the law when it comes to late payment, only in this way will the culture of late payment be tackled”.
Responding to confirmation that the role of a Small Business Commissioner will form part of the new Enterprise Bill, Charles Wilson says: “Just 1% of the debts coming to us for legal intervention are disputed so while this measure, first announced in May, is a step in the right direction, it is not going to change the behaviour of habitual late payers.
“Whoever takes the role of Small Business Commissioner needs to help small businesses to use the tools and late payment law already available to them to claim late payment compensation and interest. A Letter Before Action which can be issued for as little as £1.50 works in 84% of cases and under the Late Payment law, businesses can make claims for debts going back six years. We have just helped a physiotherapist in a typical David and Goliath scenario, claim £41,000 in unpaid invoices, late payment interest and compensation.
“The law is there, businesses just need guidance on how they can use it and more realistic recoverable legal costs would further discourage late payers from risking court claims, and encourage the new culture that business so badly needs.”