Local Authority

Hi. We have formally written & intimated late payment interest claims. The contract allows interest at 5% above the base rate of the Bank of England current at the time the payment became overdue. Our claim is for 5.5% of the sum owed plus compensation for the the period of 14 days after our invoice date until the date payment was received. The LA argue;
1. That there is no entitlement to compensation as "a substantial remedy for late payment is provided (the contract allows 5% above the base rate of the B of E)for in the contract. Do we have an entitlement to compensation as per the Act ?.
2.LA say that were an account has been finalised that any claim for interest should have been included within the final account. Is this correct ? Do we not have 5 years to exercise the right to claim ? We have not signed the certificates in relation to the final accounts.
3.The LA operated an electronic Visa payment system. They claim that, irrelevent of our invoice date the "due date" is that at which we acknowledge the payment (by acceptance)and accordingly we have no entitlement. We believe that the due date is 14 days after the date of our invoices (sent electronically). Can you advise please.

We enclose a copy of the LA response to our claim for interest and compensation.

We look forward with interest to your response.

Archie Thorburn

Hi Archie,

We are not solicitors but can provide the following as general guidance only.

Regarding point 1, it is our understanding that if a contract includes clauses relating to late payment penalties, these would supersede the provisions of the late payment legislation. Thus if the contract allows for 5.5% and no costs you would be limited to this amount.

As for points 2 and 3 we can not comment as we do not have the necessary details. Do you know a friendly local solicitor?

Not sure if you got my response. We thought as much on point 1. We will post the outcome for future reference.