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18 August 2014 | Will Green
More than eight out of 10 firms have failed to update their terms and conditions to take advantage of new late payment regulations that came into force last year, a survey has revealed.
Law firm Lovetts said just 32 per cent, out of more than 100 businesses, were claiming legal recovery costs and compensation on late payments "as a matter of course", even though the ability to do so was put into law as part of the UK adopting an EU directive.
Lovetts said the findings came despite an increase in the number of bad debts and almost a quarter of firms saying the problem had worsened in the past year.
The company said lack of awareness or fear of upsetting customers may be behind the figures.
Charles Wilson, CEO of Lovetts, said: “Our survey suggests businesses are missing a major opportunity to claim compensation and reasonable costs on overdue invoices – effectively making the debt recovery free.
“Of course, what businesses may fear is that legal costs could spiral given the huge increase in court fees earlier this year, but if they implement the new regulations, many businesses could actually find most of their legal costs are covered.”
Separate research by Bacs has found a quarter of UK businesses are forced to pay their suppliers late because they in turn are waiting for payment.