Late payment and 'grossly unfair' terms and practices: changes to the regulations
Download the full outcome
Detail of outcome
Given broad support for the proposal, we will make a change to the UK’s statutory framework to widen the power representative bodies currently have to challenge certain contract terms and practices deemed ‘grossly unfair’. This change is subject to Parliamentary approval. Under this change, representative bodies will have the flexibility to decide whether to take action on behalf of individual businesses or groups of individual businesses. Representative bodies will be able to decide whether to take action on behalf of members or non-members.
Following the views expressed on the draft regulations, we have included ‘practices’ as well as ‘terms’. We have removed the reference to small and medium-sized enterprises from Regulation 3(1) of the Late Payment of Commercial Debts Regulations 2002 so that a ‘representative body’ is defined as: “an organisation established to represent the collective interests of any enterprise, either in general or in a particular sector or area”.
See the revised regulations and impact assessment.
These changes are part of a broad range of action the government is taking to tackle late payment and unfair payment terms and practices.
Detail of feedback received
We received 32 responses from interested parties, including:
- business representative bodies
- trade organisations
- professional bodies
- businesses
- individuals
Of these, 6 responses made either general comments on the wording of the draft regulation or outlined personal experience of late payment only. While these experiences are useful to understand in developing late payment policy, these did not directly answer the questions asked in the consultation paper.
The document above provides a summary of the responses received.
Original consultation
Consultation description
In February 2015, we published a discussion paper to seek views on how to provide business representative bodies with wider powers to challenge ‘grossly unfair’ contract terms and practices. It also asked whether we should better define ‘grossly unfair’ in UK law.
In this consultation we’re seeking your views on proposals to change the UK’s statutory framework.
Documents
Last updated 19 February 2018 + show all updates
-
Added summary of responses and government response.
-
First published.