DON’T FORGET THE INTEREST
By Joseph Oates, Partner
The normal rule of commercial life is that a debt which is outstanding attracts interest. Many hard-pressed businesses, however, overlook their right to claim interest on outstanding monies. Even if there are no terms and conditions or no provision for interest in the contract of supply, the law permits the charging of interest on commercial debts at a current rate of 8% over Bank of England base rate.
The increase in the small claims threshold at court for claims up to £10,000 means that if a business has to resort to court to recover monies owed, it should not expect to receive legal costs. By ensuring that interest is claimed on overdue invoices, suppliers can mitigate their losses and get what is rightfully due.
While the award of interest is the discretion of the court, clear contractual terms or reliance upon the correct statutory provisions usually leads to a straightforward order, which can be enforced upon the debtor.
Should you have any questions regarding commercial debt, please contact Joseph Oates on tel: 01892 515022 or firstname.lastname@example.org