Home > Uncategorized > EU Late payment directive. Will it work?

EU Late payment directive. Will it work?

Of course not.

We live in a free market (thankfully) and simply put, the relationship between supplier and client in this competitive world is such that well meaning outside influence on the terms of the contract is bound to fail. It is a complete waste of time

To put it bluntly, are you going to start reeling off the terms of this directive to your biggest client when they are a week late with settlement? I don’t think so

But here are the proposals, if you are still curious

The main points outlined in the EU Directive are that:

Public authorities will be required to pay suppliers within 30 calendar days of receipt of an undisputed invoice (this matches the UK Government’s standard practice for the public sector)
For business to business payments, the period for payment fixed in the contract should not exceed 60 days, unless otherwise expressly agreed and provided such terms are not grossly unfair
It copies current UK practice of a default payment period of 30 days, where terms have not been agreed
There is a minimum €40 (approximately £31) for compensation (current UK legislation sets three levels of compensation payment according to the value of the payment). Suppliers will not be prevented from seeking to claim additional recovery costs.

Link is http://www.bis.gov.uk/Consultations/combating-late-payment-in-commercial-transactions?cat=open

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