The Commercial Payments Bill has been introduced to Parliament, containing a range of measures aimed at tackling late payments.

We have previously discussed (here) measures that the Government has recently introduced to address what it has described as  “the scourge of late payments”. Alongside these, it also launched a consultation on proposed legislation on tackling poor payment practices last year.

Following the results of the consultation, the Commercial Payments Bill found its way into the King’s Speech (alongside others discussed here) and has now been formally introduced to Parliament.

In addition to specific provisions aimed at construction contracts, the Bill generally shifts the balance of power towards suppliers by restricting lengthy payment terms, strengthening incentives for prompt payment, and expanding the powers of the Small Business Commissioner. In particular, it includes the following measures:

1. 1. A maximum payment term in commercial contracts of 60 days with limited exemptions;
   2. Mandatory statutory interest (8% above the Bank of England Base Rate) on late payments;
   3. The right for suppliers to recover a fixed sum from purchasers where a dispute is raised late or without giving sufficient information;
   4. Strengthened powers for the Small Business Commissioner to:
      1. Investigate larger businesses suspected of persistently engaging in poor payment practices and breaching payments legislation, making recommendations and taking enforcement action where appropriate;
      2. Adjudicate contractual payment disputes between small and larger businesses outside of the court process and make binding interim decisions; and
      3. Take enforcement action against larger businesses that are in breach of their statutory reporting requirements on payment practices and performance.

To read the Bill in full, click here.