SCAM ? administrator charging late payment interest & charges

From what I gather, correct me if I'm wrong, the ruttle case was only about interest, the late payment penalty didnt come into this. This was for an outstanding debt and was nothing to do with interest and penalty on invoices already paid going back 6 years !

Correct ?

This law is dead duck as far as claiming for invoices already paid and settled !

I still say ' if you raise a demand for late payment and the customer ignores it, what are you going to do about it ? Is it really worth the hassel of going to court ? I doubt it ! If the customer ignores it, as they will if they have any sense, the only thing you can do is go to court.

All those people who have been asked for a late payment fee, I suggest you ignore them and go to court. See how far they will go !

There is no case which I'm aware of, which it has been ruled that late payment can be claimed on invoices already paid and settled.

If you know of any, please let us all know !

James wrote:

From what I gather, correct me if I'm wrong, the ruttle case was only about interest, the late payment penalty didnt come into this. This was for an outstanding debt and was nothing to do with interest and penalty on invoices already paid going back 6 years !

Correct ?

No this is incorrect, the case related to late payment costs and interest and addressed specific points including:

Late payment costs being added to individual invoices. The High Court ruled this is both allowed and legally enforceable.

The impact of issuing incorrect invoices and claiming late payment costs and interest. Even if the invoice has an error, timely payment should be issued on any amount not in query. Errors on invoices are not a permissible reason for late payment.

James wrote:

I still say ' if you raise a demand for late payment and the customer ignores it, what are you going to do about it ? Is it really worth the hassel of going to court ? I doubt it ! If the customer ignores it, as they will if they have any sense, the only thing you can do is go to court.

If you include the late payment charge and your customer only pays what would equal the original amount, legally they have paid the costs and interest first and part paid the outstanding invoice.

If you then issue proceedings it is not for unpaid costs and interest, it is merely for the remainder of the original invoice.

This distinction is small, but vitally important.

We do not agree the legislation is a dead duck, as we remember the days prior to the introduction of the legislation when businesses had absolutely no statutory entitlement to any late payment costs and interest unless they included the same in their own T&C's or contracts.

If you do not agree then you are free to ignore the legislation.

If you wish to ensure you do not get caught with retrospective claims then it is important to ensure you pay you suppliers on time and within the terms agreed.

If you would like to review the judgement in the Ruttle case you can do so here:

www.bailii.org/ew/cases/EWCA/Civ/2009/97.html

The Ruttle case did not include late payment penalty, but late payment interest. Correct ?

There is no ruling regarding a company deciding to go back 6 years over invoices previously settled. Correct ?

How many companies add late payment penalties to customers accounts on each and every invoice paid late ?

A) If you tried to, you would soon lose the customer.
B) If the customer had already stopped doing business with you, all they have to say is all invoices where settled and no dispute was raised at the time.

Correct ?

So for the late payment law to work, each and every invoice paid late, the charge each time should be added to the customer's account and the customer advised that this has been added. Further that their payment received has been allocated to the late payment fee and that part of their invoiced remains outstanding - Is this the way the late payment law needs to be implemented ?

So how many businesses are going to do this ?

This appears to be the only way late payment law can be applied - Correct ?

If so, it doesnt work !!!

It is 2 months on and most of the targetted businesses have now had a revised calculation based on the correct payment date. Having read the discussion I provoked my questions are:-
1. The demand is for Interest and Compensation not outstanding debt (the previous owner of the business that raised the original invoices has confirmed that all payments received were taken as payments towards the invoices and that no late payment interest or compensation was added). Your disussion seems to suggest that the law does not support going to court to redeem this.

2. Help pamphlets say that compensation charges can be added where appropriate - how does this get interpreted by the courts. Is £40 'appropriate' on individual invoices where the calculated interest is less than £1 and where a single order has many part deliveries ?

3. If I dispute the correctness of the data on which they have based charges is it up to me to disprove it or them to prove it ? The usual way of opperating with the company in question was to get onto the phone with the owner to resolve problems - there is very little paper trail to support some of the resolutions.

Your help is much appreciated because this matter is causing concern to number of small businesses who are being unfairly targetted by Administrators.

.

James, we have just collected late payment costs and interest totalling almost £2k plus £10K worth of overdue invoices for a client. The dates ranged from Jan - September this year. The debtor company knew the risks for blatantly ignoring our clients demands for payment and paid the appropriate price. Simply put, the law, when applied properly & enforced correctly, works well for small business.

Could it be better? yes.
Could it be more defined? Yes.

But it's all we have at the moment and it's far, far better than nothing at all!

As for notification, if you add the charges and the customer pays the original amount it is as simple as allocating the funds to the charges first and chasing the balance. The site has some excellent letters to help you in that regard.

As for losing a customer, last time I checked good customer's paid on time.

Wendy in relation to your points above.

1. The claim is still legitimate as far as we understand the legislation. If the invoices were paid late the business owner has the option to include charges. But again the statute is six years and the law allows for retrospective claims. Would a judge interpret it as profiteering? Who knows!

2. Again the legislation is vague, but we would argue that adding £40 costs to an invoice for £1 is not appropriate (or reasonable!). But technically it is legal.

3. If you are on good terms with the director would he be willing to assist you? Remember authorised credit extensions do not have to be in writing and if the credit period was extended no charges would be applicable... If not we imagine it will come down to the small details. If you can prove you paid invoices by BACS or cheque you are covered.

If the administrators are now looking to claim monies retrospectively we would certainly suggest the onus would be on them to prove the legitimacy of the claim!