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Statutory Compensation Query

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9 years 1 month ago #1673 by tomt
Hi,
Reading the guidance on here about Statutory Compensation has been enlightening. I was looking for guidance on a couple of things if possible:

1. Is Statutory Compensation still due if your recovery actions are non-quantifiable or you didn't take action to recover the debt (e.g. a staff member send a few emails and a couple of calls, but the cost is not recorded, or where an invoice is overdue by a month, but before you had the chance to take action it got paid albeit late)?

2. For local authority contracts, my legal advice has been that statutory interest overrides any contractual clauses that call for a lower interest rate. However, does statutory compensation also apply where no compensation (beyond interest) has been prescribed/agreed contractually?

3. We're looking at 6 years of late payments. If we were entitled to statutory compensation, has it always been £40/£70/£100 throughout the last 6 years? (I don't want to request the wrong amount for historical invoices)

Any help would be greatly appreciated,
Tom

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7 years 3 weeks ago #2021 by tomt
Just nudging this old post of mine to see if anyone can help?
Thanks,
Tom

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7 years 3 weeks ago #2022 by james@cpa.co.uk
Hi Tomt,

Sorry, I hadn't seen your older post which had been submitted before I started moderating this forum.

1) Statutory compensation does not have to be justified. You don't have to show how you have incurred costs equal to the £40/£70/£100 in collecting the debt. It is a fixed statutory award.

2) I beleive you are correct that statutory interest is a minimum. You can agree a higher rate but a contract can't impose a lower rate. Also statutory compensation is an automatic right. It doesn't have to be contractually agreed nor can it be contractually waived.

3) Yes, the rates of £40, £70 and £100 have been constant since the legislation was passed.

I hope that helps Tom.

If you need any help with the claims or with the collection, we at CPA will be happy to help. Feel free to email me at This email address is being protected from spambots. You need JavaScript enabled to view it..

James.

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