Late Payment of Commercial Debts (Interest) Act 1998

hort_3

Hello,

We dealt with a Horticultural for over 20 years, they went in to administration this time last year.

Their general terms of sale in the back of their catalogue states: payment is due by the 28th of the following month.

However for the last twenty years we have always paid our bills within 60 days, it was never a written condition but was always a verbal agreement we had, hence we have had a good working relationship for over 20 years.

This time last year the company suddenly went in to administration,
we had a few invoices owing when the company went down which we
paid only 12 days out of their standard conditions.

Last week we suddenly received a letter from the administrators
stating that we must pay them £700 in late payment charges an
interest by a date in only two weeks time.

The interest comes to about £60 the rest is LPC which they have
charge per invoice.

They state that they are doing this by using the: Late Payment of Commercial Debts (Interest) Act 1998

Can they do this??

All the invoices have been paid? Some of the invoices go right back to
the beginning of last year when the company where still trading as
normal?

I would really appreciate any help anyone can offer me?

It seems so unfair that they can suddenly do this? If we didn’t have
that agreement with the company they wouldn’t of traded with us?

Many thanks in advance
:mad:

srcandas

Are you saying that you do not trade with them now? And therefore the last transaction and payment was a year ago?

Whenever I have seen something like this before it was a try on. I would politelty point them to the history of previous transactions pointing out the understanding in action.

I have seen a few receivers/administrators in action and they'll do what they can to claw in cash but they know when dealing with small amounts that any serious action will cost them, normally, more than it is worth. And if they seriously have not commented on this for almost a year

:beer:

hort_3

srcandas wrote: »

Are you saying that you do not trade with them now? And therefore the last transaction and payment was a year ago?

Whenever I have seen something like this before it was a try on. I would politelty point them to the history of previous transactions pointing out the understanding in action.

I have seen a few receivers/administrators in action and they'll do what they can to claw in cash but they know when dealing with small amounts that any serious action will cost them, normally, more than it is worth. And if they seriously have not commented on this for almost a year


:beer:

Yes its all about a year ago now and only just decided to now demand the late payments charges?? I did explain about the way we paid but they didnt really seem to care or listen. I have just recieved another letter today again saying they are demanding the money under the same law? But it just seems so wrong afterall this time that they can demand the money???

hort_3

hort wrote: »

Yes its all about a year ago now and only just decided to now demand the late payments charges?? I did explain about the way we paid but they didnt really seem to care or listen. I have just recieved another letter today again saying they are demanding the money under the same law? But it just seems so wrong afterall this time that they can demand the money???

An sorry no we dont trade with them anymore because they went in to adminstration so longer trade

toddle2u

Did their terms and conditions state that they were able to charge Late Payment charges and interest?

Personally I would wrrite to the Administrators and tell them these were not the T&C's in force when you set up your credit account with the Company 20 years ago and therefore were not applicable in this instance. Further you had a verbal agreement with the Directors to pay on 60 days. A verbal agreement can also a contract in law. Tell them you are more than willing to defend any action they may bring. You can prove a history of paying on 60 days and that no Late Payment charges or interest were applied prior to the company entering Administrtion which will go a long way to proving that you had an agreement to do this. They are trying it on so fight your corner and do not pay them. Let them take you to Court and let a Judge decide. It will be allocated to small claims so they won't be able to reclaim their costs. My guess is that they won't issue proceedings once you state your case.

srcandas

This comes from an HSBC knowledge base:

"Liquidators and receivers acting in connection with a business can also pursue ex-customers for interest on late payments, going back up to six years.".

So you need I guess to fight this on the basis of the verbal agreement.

However I noted this on one site:

"Otherwise, whatever is the norm for that business sector or has been the established convention.

The Act recognises that many businesses have a long-standing practice of paying/being paid at the end of the month following the one in which the invoice was produced (effectively betwen 30 and 60 days credit). In this case the credit period is as per this convention."

but it is unclear if this relates to where no agreed terms exist.

Unfortunately I cannot find solid reference to "notification timescales and methods".

Well hope someone wiser than me can help but wishing you success as I believe after a year with not even a hint of disgruntlement that this is very unfair. :beer:

antrobus

When your ordered goods from the horticultural supplier did you send them any kind of purchase order, and did that purchase order refer to any of your terms and conditions?

hort_3

toddle2u wrote: »

Did their terms and conditions state that they were able to charge Late Payment charges and interest?

Personally I would wrrite to the Administrators and tell them these were not the T&C's in force when you set up your credit account with the Company 20 years ago and therefore were not applicable in this instance. Further you had a verbal agreement with the Directors to pay on 60 days. A verbal agreement can also a contract in law. Tell them you are more than willing to defend any action they may bring. You can prove a history of paying on 60 days and that no Late Payment charges or interest were applied prior to the company entering Administrtion which will go a long way to proving that you had an agreement to do this. They are trying it on so fight your corner and do not pay them. Let them take you to Court and let a Judge decide. It will be allocated to small claims so they won't be able to reclaim their costs. My guess is that they won't issue proceedings once you state your case.

This is a very good point! No there terms do not say anything about a late payment fee just a 2% interest charge will be applyed?

hort_3

antrobus wrote: »

When your ordered goods from the horticultural supplier did you send them any kind of purchase order, and did that purchase order refer to any of your terms and conditions?

No unfortunatly not

hort_3

srcandas wrote: »

This comes from an HSBC knowledge base:

"Liquidators and receivers acting in connection with a business can also pursue ex-customers for interest on late payments, going back up to six years.".

So you need I guess to fight this on the basis of the verbal agreement.

However I noted this on one site:

"Otherwise, whatever is the norm for that business sector or has been the established convention.

The Act recognises that many businesses have a long-standing practice of paying/being paid at the end of the month following the one in which the invoice was produced (effectively betwen 30 and 60 days credit). In this case the credit period is as per this convention."

but it is unclear if this relates to where no agreed terms exist.

Unfortunately I cannot find solid reference to "notification timescales and methods".

Well hope someone wiser than me can help but wishing you success as I believe after a year with not even a hint of disgruntlement that this is very unfair. :beer:

Thanks for your advise, very help full

paulwf

hort - check your business insurance, chances are you have access to a free legal helpline. I think the FSB may also provide this and it might be worth having a chat with your accountant.

A similar thread to this popped up recently, I have never heard of it before but it sounds like administrators are now becoming greedy. If every company applied their late payment charges or didn't allow invoices to go a few days overdue they would soon lose a lot of their customers, a lot of businesses give their long standing customers a little leeway.