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Creditor refuses to pay interest because they did not receive a reminder

6 years 6 months ago #1829 by RThompson
Hi - I've got a query that I can't find a definitive answer to. I wonder if anyone here can help me?

In August 2009 my company submitted an invoice for completed work that had been accepted. Receipt of the invoice was acknowledged by the client organisation.

Three years later the invoice remained unpaid. I submitted an amended invoice including interest due under the Late Payment of Commercial Debts Act 1998. Two months after that the original principal was paid into my company bank account with no letter or explanation.

I sent another letter requesting that the interest be paid in full. I received a reply stating that because my company had taken no action over the three years to collect the debt, that their interpretation of "the interests of justice" (Section 5 of the statute) meant that they believed no interest was payable. As such, they refused to pay the interest or fee owing, offering just £200 as compensation for taking a further 2 months to pay the principal.

Now in "A Users Guide to the recast Late Payment Directive" (Department for Business, Innovation and Skills, October 2014) which covers the 2013 amendment to the legislation, it states "In cases of late payment, you are entitled to claim interest for the late payment without a reminder." However, in the earlier "A User's guide to late payment legislation" (Business Link) which covers the legislation when the late payment occured, there is no mention of whether a reminder is required or not.

Are they correct in saying that no interest payment is due because no reminder was issued? Or does the statement in the 2013 guidance that "no reminder is required" also apply to the 1998 and 2002 legislation?

If no reminder is required, is there any official reference to this or relevent case history? I've googled quite extensively but can't find anything either way.

Many thanks


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6 years 6 months ago #1830 by RThompson
Of course I meant "debtor", not "creditor". :-)

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6 years 6 months ago - 6 years 6 months ago #1831 by jimbo22
They are wrong.

Interest and compensation is due, even if the principle sum has been paid.

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6 years 6 months ago #1837 by rbw@specdoc.co.uk
we have had a similar case, and I don't know the answer, nor how to proceed.
Our Customer though did have frequent reminders , and on 2 occasions gave us dates when the Invoice would be paid but did not pay until another 3rd date.
Due to the fact they did not pay on the first occasion we raised a Late Payment Invoice, which has since been amended to reflect the date they did pay.
But today we have had communication from our Customer's mother company that they do not pay late payment charges.
Can we still pursue this, and if so how, small claims court? What are our options in the light of this statment

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6 years 6 months ago #1839 by David J
Hello Mary
So is your customer exempt from UK law? If not then a statement like "they will not pay the late payment interest and compensation" is ridiculous.

Technically interest is still running on the full principal amount as they have not paid your claim for interest and compensation.

You could pursue this claim yourself but why not use the services of a professional? If the debt was created after the 16 of march 2013 then you can add the cost of any extra fees to your claim.

So the customer will have to pay compensation, interest (which is going up each day) and the cost of any fees incurred by hiring a professional debt recovery expert.

If you want to PM me I can pass on some contact details for you.

Best regards


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