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Complaints Scheme For Late Payments In Business To Business Contracts


Introduction

Following the article I shared in April this year, a new complaints scheme aiming to tackle late payment in business to business contracts will be available from 1st October 2017.

A Small Business Commissioner (“SBC”) is being appointed to administer the scheme who will handle complaints from small businesses regarding payment issues with larger businesses. The SBC will be able to “name and shame” large businesses that have not followed fair and reasonable payment practices.

The scheme will operate separately from the payment reporting duty imposed on larger business from 6th April 2017 as covered by the article mentioned above.

What Complaints and Which Businesses?

More detail may be found at http://www.legislation.gov.uk/ukdsi/2017/9780111159217 but in summary:

1. the SBC will broadly consider complaints about payment;

2. a complaint must normally be submitted to the SBC within 12 months from the date on which the matter to which the complaint relates took place;

3. to make a complaint, a business must have a staff headcount of fewer than 50 people; and

4. before submitting a complaint to the SBC, the small business must communicate the complaint to the larger business to allow the larger business a reasonable opportunity to deal with it. An exception to this is where proceeding in this manner would have a significant detrimental effect on the commercial interests of the small business.

Comment

Although the SBC’s findings are not legally binding, from 1st October 2017 large businesses will have additional encouragement to pay on time. That is, the risk of being “named and shamed”.

This should not be relied upon for legal advice. If you would like any further information or advice please email richard@clariclegal.co.uk.

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