The UK Legal Framework for Creditors #

Key Legislation #

The main laws protecting creditors include:

• Late Payment of Commercial Debts (Interest) Act 1998
• Companies Act 2006
• Insolvency Act 1986
• Enterprise Act 2002
• Limitation Act 1980

Payment Terms Legislation #

The law provides framework for payment terms:

• Maximum 60-day payment terms unless expressly agreed
• 30-day terms for public sector contracts
• Right to interest after term expiry
• Prohibition of unfair payment terms

Debt Recovery Framework #

Legal processes available include:

• County Court claims
• High Court enforcement
• Statutory demands
• Insolvency proceedings
• Alternative dispute resolution

Insolvency Framework #

The insolvency regime provides:

• Defined order of creditor priority
• Protected actions and transactions
• Collective procedures
• Administrator/liquidator duties
• Creditor participation rights

Commercial Law Protection #

General commercial law provides:

• Contract formation rules
• Breach of contract remedies
• Specific performance options
• Damages calculations
• Set-off rights

Regulatory Framework #

Additional protection through:

• Financial Conduct Authority regulations
• Prompt Payment Code
• Small Business Commissioner
• Industry-specific regulations
• Professional standards