Proposals to grant business groups the power to challenge unfair payment terms on behalf of their members are being considered by the government.
As part of its plans to improve payment practices and crack down on overdue payments, the government wants to widen the powers currently given to representative bodies to allow them to act on behalf of small firms who wish to speak out against larger companies that delay paying their bills.
The Department for Business, Innovation and Skills’ proposals, which are subject to consultation, include giving more organisations the power to bring a claim against large companies they think are imposing “unreasonable” payment terms on their suppliers.
It is also considering whether to redefine what makes a payment term “grossly unfair” and provide criteria that courts could take into account when assessing whether practices are reasonable.
The plans have been welcomed by the RHA, which has been lobbying for an improvement to payment practices for a number of years.
“It’s an issue that has been of great concern to our members,” said RHA director of policy Jack Semple. “We have lots of examples of what is grossly unfair and we are currently getting more from our members.”
