Partner Article

Lovetts says government response to ‘building a responsible payment culture’ consultation lacks bite

Once again, the Government has missed an important opportunity to help UK businesses tackle late payment. This is the view of Charles Wilson, CEO of Lovetts Plc, the commercial debt recovery legal firm, following the Department of Business Innovation and Skills’ (BIS) consultation response on ‘Building a Responsible Payment Culture’ published 30/5/14.

Charles Wilson says: “The BIS response lacks any firm action and we are particularly disappointed that the Government has chosen not define what payment periods should be presumed to constitute ‘unfair payment terms’. Instead, the focus is on advice and codes of best practice, which already exist.

“I am also doubtful of the impact of the naming and shaming approach. Late payment is seen almost as a badge of honour by many businesses at the top of the supply chain, they know that their custom is valuable to their suppliers and use this to their advantage. Again this response appears weak.

“Whilst it is true that legislation cannot solve the endemic refusal to pay on time – the under-used Late Payment Acts have shown us that – I do believe that strong support for our legal system, and late payment remedies, at the legal end of the chain can only help. Over a third of our commercial claims include late payment compensation, showing that many businesses do use these tools when given to them.

“Sadly the Government has acted too weakly despite their proclamations of support for businesses. The European Directive last year (2011/7/EU) was adopted by the Government late in the day, and no collateral support was given to court users to help them recover realistic legal costs for the majority of claims, being those under £10,000. Then earlier this year Court fees were doubled making it more costly for businesses to pursue debts through the Court system.

“What UK businesses so badly need is reforms to both payment and collection processes with bite and clarity. I see none of this in this latest output.”

Charles Wilson, CEO of Lovetts

www.lovetts.co.uk

This was posted in Bdaily's Members' News section by Charles Wilson .