Legislation is now in place that will penalise large companies who don't cough up on time.

Payback time

Small businesses, those with 50 or less employees, can claim interest on overdue debts from large companies and public sector organisations. As of 1 November 1998, there is a statutory right to claim interest at 8% above base rate on bills paid late. The Act’s scope will include all businesses and the public sector after 1November 2002. Watch out for contract terms that circumvent the Act. Parties may write in their own methods of late payment remedy, not always good ones.

Source

Electrical and Mechanical Contractor

Postscript

Stephen Sidkin is a partner and Meena Guram a trainee solicitor in the City law firm Fox Williams.