BLA Commercial Debt Recovery Policy
1. Business Legal Advice details
1.1 Business Legal Advice provides fixed-fee commercial debt recovery support for UK businesses owed money under unpaid invoices, late commercial payments, unpaid service charges, unpaid goods supplied, and business-to-business contractual debts.
1.2 Business Legal AdviceOffice 496558 Peregrine RoadIlfordEssexIG6 3SZUnited Kingdom
1.3 Email: [william@businesslegaladvice.co.uk](mailto:william@businesslegaladvice.co.uk)Telephone: 07946224674Website: [www.businesslegaladvice.co.uk](http://www.businesslegaladvice.co.uk)
1.4 Business Legal Advice provides business legal support, pre-action assistance, statutory debt calculations, document drafting support, settlement support and practical recovery strategy.
1.5 Business Legal Advice is not a firm of solicitors and does not hold itself out as conducting reserved litigation activities as a solicitor.
2. Purpose of this Policy
2.1 This Policy explains how Business Legal Advice approaches commercial debt recovery, how unpaid business debts are assessed, when statutory late payment rights may apply, and how interest, compensation and reasonable recovery costs may be pursued.
2.2 This Policy is written for business-to-business debts. It does not apply automatically to consumer debts, personal debts, regulated credit agreements, insolvency work, or cases requiring reserved litigation services.
2.3 The purpose of this Policy is to set out the legal and commercial basis on which Business Legal Advice may assist with recovery of unpaid commercial debts.
2.4 Business Legal Advice’s approach is not simply to send aggressive payment demands. The first question is whether the debt is legally due, properly evidenced, correctly calculated, commercially proportionate and suitable for recovery action.
2.5 A strong debt recovery position normally requires evidence of the contract, the parties, the work or goods supplied, the payment terms, the due date, the amount outstanding, and any statutory or contractual additions claimed.
3. Main statutory framework
3.1 The principal statutory framework for late payment in business-to-business debt recovery is the Late Payment of Commercial Debts (Interest) Act 1998, as amended and supplemented by the Late Payment of Commercial Debts Regulations 2002 and the Late Payment of Commercial Debts Regulations 2013.
3.2 The Late Payment of Commercial Debts (Interest) Act 1998 creates a statutory regime for qualifying commercial debts arising from contracts for the supply of goods or services.
3.3 Where the statutory conditions are met, a supplier may be entitled to statutory interest on late payment.
3.4 The statutory regime may also allow fixed compensation and, where the fixed compensation does not cover the reasonable costs of recovery, additional reasonable recovery costs.
4. Qualifying commercial debts
4.1 A debt must usually arise from an obligation to pay the contract price under a commercial contract for the supply of goods or services.
4.2 The creditor must normally be acting in the course of business.
4.3 The debtor must also usually be acting in the course of business.
4.4 Consumer debts require separate assessment and are not treated as ordinary commercial late payment debts under this Policy.
4.5 Business Legal Advice will assess whether the debt appears to be a qualifying debt before including statutory interest, fixed compensation or reasonable recovery costs in a demand, settlement proposal or draft claim.
5. When payment becomes late
5.1 Payment becomes late when the agreed contractual payment date has passed.
5.2 Where there is no express payment date, payment may become late when the statutory provisions deem payment to be late.
5.3 Business Legal Advice will review the invoice, contract, purchase order, terms and conditions, email agreement, payment history, course of dealing and any agreed credit period to identify the correct due date.
5.4 A demand should not simply assert that a debt is late. It should explain when payment became due and why the debtor is now in default.
6. Statutory interest
6.1 For qualifying business-to-business debts, statutory interest is generally calculated at 8% above the applicable Bank of England reference rate.
6.2 Statutory interest is simple interest, calculated on a daily basis.
6.3 Statutory interest is not compound interest unless a different lawful contractual arrangement applies.
6.4 Business Legal Advice will normally calculate interest from the date statutory interest begins to run until the date of the demand.
6.5 Where appropriate, Business Legal Advice will state that interest continues to accrue until payment, settlement or judgment.
7. Fixed statutory compensation
7.1 Where statutory interest begins to run on a qualifying debt, the supplier may also be entitled to fixed statutory compensation.
7.2 The fixed compensation bands are generally as follows:
7.2.1 £40 for a debt of less than £1,000.7.2.2 £70 for a debt of £1,000 or more but less than £10,000.7.2.3 £100 for a debt of £10,000 or more.
7.3 Compensation is not a penalty clause. It is a statutory sum connected with late payment.
7.4 Business Legal Advice will still assess whether it is appropriate and proportionate to include fixed compensation in the recovery calculation.
8. Reasonable recovery costs
8.1 Where the creditor’s reasonable costs of recovering the debt exceed the fixed statutory compensation, the creditor may seek to recover the additional reasonable costs.
8.2 Business Legal Advice fees may therefore be included in the recovery calculation where they are properly incurred, reasonable, proportionate and connected with recovery of the qualifying debt.
8.3 Recovery of Business Legal Advice fees from the debtor is not guaranteed.
8.4 The client remains responsible for Business Legal Advice fees unless and until those fees are recovered by payment, settlement or court assessment.
9. Debt assessment policy
9.1 Business Legal Advice does not automatically accept every unpaid invoice for recovery action.
9.2 A debt may be refused if it is weak, unclear, uneconomic, poorly evidenced, very old, heavily disputed, legally unsuitable, or unlikely to be paid even after judgment.
9.3 Before acting, Business Legal Advice may assess the contract, the invoice, the payment terms, the evidence of performance, the debtor’s details, any complaints or set-off allegations, the age of the debt, and the commercial value of taking action.
9.4 Business Legal Advice may recommend no action, further evidence gathering, a pre-action letter, settlement negotiation, claim drafting support, or referral to a solicitor or barrister where the matter requires reserved legal work or formal representation.
10. Evidence required before recovery action
10.1 The client should provide the invoice or invoices, quotation, contract, purchase order, terms and conditions, delivery notes, work completion evidence, emails, messages, admissions, payment reminders, account statements and any evidence of partial payment.
10.2 Where the debtor alleges defective work, poor service, delay, overcharging, non-completion or set-off, the client must provide the debtor’s complaint and the client’s response.
10.3 Business Legal Advice may decline to send a demand where the evidence does not support the amount claimed.
10.4 Business Legal Advice may also decline to send a demand where the proposed demand would overstate the client’s legal position.
11. Correct party and legal identity
11.1 Business Legal Advice will check whether the correct debtor has been identified.
11.2 This may include reviewing the trading name, limited company name, company number, registered office, business address and the person or entity that actually contracted with the client.
11.3 A claim or demand sent to the wrong party can weaken recovery prospects and create unnecessary costs.
11.4 Where there is uncertainty about the debtor’s legal identity, Business Legal Advice may ask for further documents before preparing a formal recovery letter or claim wording.
12. Contractual terms and statutory terms
12.1 Business Legal Advice will consider whether the contract contains its own interest clause, debt recovery clause, payment terms, set-off clause, dispute procedure or limitation on liability.
12.2 A contractual interest clause may affect whether statutory interest is available or whether a contractual remedy applies instead.
12.3 Where a contract term attempts to exclude or vary the statutory late payment regime, Business Legal Advice will consider whether the term provides a substantial remedy and whether the statutory regime may still be relied upon.
13. Stage 1: Debt review
13.1 Business Legal Advice reviews the documents and assesses whether the debt appears legally due, commercially recoverable and suitable for statutory additions.
13.2 This stage may include a review of invoice validity, contractual basis, due date, debtor identity, dispute risk and limitation risk.
13.3 The outcome may be a recommendation to proceed, request further evidence, negotiate, issue a formal demand, prepare claim documents, or take no further action.
14. Stage 2: First recovery letter
14.1 A first recovery letter may be used where the debt appears due but the client wants a proportionate demand before stronger pre-action correspondence.
14.2 The letter may identify the creditor, debtor, invoice, contract, amount due, payment deadline and consequences of non-payment.
14.3 Where appropriate, the letter may reserve the right to claim statutory interest, fixed compensation, reasonable recovery costs, court fees and further costs.
15. Stage 3: Final letter before claim
15.1 A final letter before claim is a stronger pre-action document.
15.2 It should set out the legal basis of the debt, the amount claimed, the evidence relied upon, the statutory additions and the deadline for payment or a properly evidenced dispute response.
15.3 The letter should be clear enough to show that the creditor is prepared to escalate the matter if payment is not made.
15.4 A final letter before claim should not be used as a threat without proper legal and evidential foundation.
16. Stage 4: Claim drafting support
16.1 Where pre-action correspondence does not resolve the debt, Business Legal Advice may assist with claim drafting support.
16.2 This may include draft particulars of claim, schedule of invoices, interest calculation, compensation calculation, recovery-cost calculation, chronology, evidence list and settlement wording.
16.3 Business Legal Advice does not issue proceedings as a solicitor.
16.4 If the matter requires reserved litigation work, formal conduct of litigation, advocacy or complex court representation, solicitor or barrister involvement may be recommended.
17. Stage 5: Settlement support
17.1 If the debtor responds with an offer, dispute, payment proposal or request for time to pay, Business Legal Advice may assist with settlement strategy.
17.2 Settlement may include full payment, part payment, staged payment, admission of liability, payment plan or commercial compromise.
17.3 A settlement should be recorded clearly and should state what happens if the debtor defaults.
18. Fee and recovery-cost policy
18.1 Business Legal Advice generally works on fixed-fee stages where possible.
18.2 This is intended to keep debt recovery proportionate and commercially predictable.
18.3 The client is responsible for Business Legal Advice fees when Business Legal Advice agrees to carry out the work.18.4 Where legally appropriate, those fees may be added to the debt as reasonable recovery costs.
18.5 The debtor is not automatically responsible for all client costs simply because a debt is unpaid.
18.6 Recovery depends on the legal basis, reasonableness, proportionality, payment, settlement or court assessment.
19. No guarantee of recovery
19.1 Business Legal Advice does not guarantee payment, settlement, judgment, enforcement success or recovery of legal costs.
19.2 A debtor may ignore correspondence, dispute liability, allege set-off, become insolvent, dissolve, cease trading or defend a claim.
19.3 Business Legal Advice’s role is to improve the legal clarity, evidential structure and commercial pressure of the recovery process, not to guarantee the result.
20. Proportionality
20.1 Recovery action should be proportionate to the debt amount, the evidence, the debtor’s status, the likely defence and the practical prospects of payment.
20.2 Business Legal Advice may advise that a payment plan, reduced settlement or no further action is more commercial than issuing or pursuing a claim.
20.3 A legally arguable debt may still be commercially unsuitable if the cost, time and enforcement risk outweigh the likely recovery.
21. Unsuitable debts
21.1 Business Legal Advice may decline or limit assistance where the debt is a consumer debt, very old debt, unsupported debt, disputed construction debt, insolvency matter, regulated credit matter, harassment-risk matter, or debt requiring urgent court intervention.
21.2 Business Legal Advice may also decline assistance where the client cannot prove the contract, cannot identify the debtor, cannot show performance, cannot explain the amount claimed, or has added unsupported charges.
21.3 Business Legal Advice will not knowingly draft misleading demands, inflated claims, unjustified statutory additions or threats that are not supported by the evidence.
22. Limitation and older debts
22.1 Older debts require careful limitation analysis.
22.2 The usual limitation period for a simple contract debt is six years.
22.3 Limitation depends on the facts, the contract type, acknowledgement, part payment and other legal issues.
22.4 Business Legal Advice will consider the age of the debt before recommending recovery action.
22.5 Where limitation is uncertain or close to expiry, solicitor advice may be required urgently.
23. Court interest where the statutory late payment regime does not apply
23.1 If the Late Payment of Commercial Debts regime does not apply, there may still be other possible bases for interest, including contractual interest or court interest.
23.2 In some court claims, interest may be claimed under section 69 of the County Courts Act 1984, subject to the court’s discretion and the rules applicable to the claim.
23.3 Business Legal Advice will not assume that statutory commercial late payment interest applies unless the debt appears to fall within the relevant statutory regime.
24. Debtor disputes and set-off
24.1 If the debtor raises a genuine dispute, Business Legal Advice will assess whether the dispute affects liability, amount, interest, compensation, costs or the commercial value of recovery.
24.2 A debtor may dispute the claim by alleging defective goods, poor service, delay, non-completion, overcharging, misrepresentation, breach of contract, set-off or payment already made.
24.3 A disputed debt may still be recoverable, but the recovery strategy must reflect the litigation risk.
25. Insolvency and enforcement
25.1 A judgment does not guarantee payment.
25.2 If the debtor has no assets, is insolvent, has ceased trading or is dissolved, recovery may be unrealistic.
25.3 Business Legal Advice may consider basic debtor status as part of the commercial assessment.
25.4 Insolvency proceedings and enforcement strategy may require solicitor or specialist involvement.
25.5 Business Legal Advice may recommend that the client obtains specialist advice before incurring further fees where debtor solvency is doubtful.
26. Client responsibilities
26.1 The client must provide accurate documents, truthful instructions, complete payment history and all known disputes or complaints raised by the debtor.
26.2 The client must not ask Business Legal Advice to conceal relevant facts, exaggerate the debt, misstate the legal position or add charges that are not properly recoverable.
26.3 The client remains responsible for deciding whether to proceed, settle, issue a claim or stop recovery action.
27. Limitation on BLA services
27.1 Business Legal Advice provides business legal support, practical recovery assistance, pre-action drafting and claim drafting support.
27.2 Business Legal Advice is not a firm of solicitors and does not present itself as conducting litigation as a solicitor.
27.3 Where a case requires reserved litigation activity, formal representation, advocacy, complex procedural steps, injunctions, insolvency action or regulated legal services, Business Legal Advice may recommend solicitor or barrister involvement.
28. Booking a commercial debt recovery assessment
28.1 Before booking, the client should prepare the invoice, contract, payment terms, proof of supply, proof of completion, debtor details, payment history, previous reminders and any dispute correspondence.
28.2 Better evidence usually means a stronger letter, clearer calculation and better recovery prospects.
28.3 To book an assessment, contact Business Legal Advice at [william@businesslegaladvice.co.uk](mailto:william@businesslegaladvice.co.uk) or 07946224674.
29. Final disclaimer
29.1 This Policy is general business legal information and internal service policy.
29.2 This Policy is not a full legal opinion, legal audit or substitute for tailored advice on a specific debt.
29.3 Legal soundness depends on the contract, debtor identity, payment terms, evidence, limitation, dispute history, statutory entitlement, proportionality and recovery prospects.
29.4 Clients should obtain tailored advice before relying on this Policy for any live debt recovery decision.