The Commercial Payments Bill has now been published. Some takeaways for Commercial lawyers:
💡 The name of the Bill has changed (was the Small Business Protections (Late Payments) Bill).
💡 There are carve outs for public bodies and public contracts (since payment terms are already covered in PA23).
💡 What is a large/small/micro business will be determined by regulation.
💡 The Late Payment of Commercial Debts (Interest) Act 1998 will be known as the Commercial Payments and Interest on Late Payment Act 1998 (CPILPA).
💡 Part 1, Chapter 1, section 1 deals with changes to payment terms and does this by making changes to CPILPA – introducing maximum payment terms. There is new wording for CPILPA that says a contract term is void if it purports to provide for alternative payment terms.
💡 Part 1, Chapter 1, section 3 deals with exemptions from the changes to payment terms.
💡 Part 1, Chapter 1, section 4 deals with statutory interest rate and does this by making changes to CPILPA. There is new wording for CPILPA that says a contract term is void if it purports to exclude or vary the right to statutory interest.
💡 Part 1, Chapter 1, section 10 says that sections 1-8 (on payment terms and statutory interest) will not apply to pre-existing contracts.
💡 Part 3, Section 31 says when the provisions come into force. Regulations will be needed to bring many of the changes into force.