Late Payment: Challenging Grossly Unfair Terms And Practices

The Department of Business, Innovation and Skills (BIS) has published new proposals which seek to expand the powers of representative bodies in the UK to better tackle late payment issues. The re-cast Late Payment Directive (2011/7/EU) allows representative bodies to challenge late payment terms and practices which are 'grossly unfair' and the BIS is now consulting on how to properly incorporate this power into UK law.

In the UK, 'representative' bodies currently have only limited powers to challenge payment terms or practices on behalf of SMEs. This is narrower than the right contained in the re-cast Directive. The new right would give certain bodies the right to challenge any terms or practices deemed to be 'grossly unfair' on behalf of their members.

The proposals are seeking views on:

who might be covered by a representative claim (for example, individual businesses or groups of businesses);

which organisations can bring a claim;

the resources available to bring a case.

Additionally, the BIS is considering whether...