Search Legislation

The Late Payment of Commercial Debts (Scotland) Regulations 2002

 Help about what version

What Version

 Help about advanced features

Advanced Features

 Help about opening options

Opening Options

Changes over time for: The Late Payment of Commercial Debts (Scotland) Regulations 2002

 Help about opening options

Changes to legislation:

There are currently no known outstanding effects for the The Late Payment of Commercial Debts (Scotland) Regulations 2002. Help about Changes to Legislation

Close

Changes to Legislation

Revised legislation carried on this site may not be fully up to date. At the current time any known changes or effects made by subsequent legislation have been applied to the text of the legislation you are viewing by the editorial team. Please see ‘Frequently Asked Questions’ for details regarding the timescales for which new effects are identified and recorded on this site.

S

Scottish Statutory Instruments

2002 No. 335

CONTRACTS

The Late Payment of Commercial Debts (Scotland) Regulations 2002

Made

2nd July 2002

Laid before the Scottish Parliament

4th July 2002

Coming into force

7th August 2002

The Scottish Ministers, in exercise of the powers conferred by section 2(2) of the European Communities Act 1972F1 and of all other powers enabling them in that behalf hereby make the following Regulations:

F11972 c.68. Section 2(2) was amended by the Scotland Act 1998 (c.46), Schedule 8, paragraph 15(3). The functions conferred upon the Minister of the Crown under section 2(2) of the 1972 Act, insofar as within devolved competence, were transferred to the Scottish Ministers by virtue of section 53 of the Scotland Act 1998.

Citation, commencement and extentS

1.—(1) These Regulations may be cited as the Late Payment of Commercial Debts (Scotland) Regulations 2002 and shall come into force on 7th August 2002.

(2) These Regulations extend to Scotland only.

Amendments of the Late Payment of Commercial Debts (Interest) Act 1998S

2.—(1) The Late Payment of Commercial Debts (Interest) Act 1998 F2 shall be amended as follows:–

(2) Section 2(5)(c) and (6) (the Scottish Ministers’ power to specify by order categories of contracts as excepted contracts) are repealed.

(3) After section 2, there shall be inserted–

2A.     Application of the Act to Advocates

The provisions of this Act apply to a transaction in respect of which fees are paid for professional services to a member of the Faculty of Advocates as they apply to a contract for the supply of services for the purpose of this Act..

(4) Section 3(4) and (5) (debts not to carry statutory interest if specified in an order made by the Scottish Ministers) are repealed.

(5) After section 5, there shall be inserted–

5A.     Compensation arising out of late payment

(1) Once statutory interest begins to run in relation to a qualifying debt, the supplier shall be entitled to a fixed sum (in addition to the statutory interest on the debt).

(2) That sum shall be–

(a)for a debt less than £1000, the sum of £40;

(b)for a debt of £1000 or more, but less than £10,000, the sum of £70;

(c)for a debt of £10,000 or more, the sum of £100.

(3) The obligation to pay an additional fixed sum under this section in respect of a qualifying debt shall be treated as part of the term implied by section 1(1) in the contract creating the debt..

F21998 c.20; the functions of the Secretary of State transferred to the Scottish Ministers by virtue of section 53 of the Scotland Act 1998.

Proceedings restraining use of grossly unfair termsS

[F33.(1) In this regulation, “representative body” means an organisation established to represent the collective interests of any undertaking, either in general or in a particular sector or area.

(2) Paragraph (3) applies where a person acting in the course of a business enters (or intends to enter) as purchaser into a contract to which the Late Payment of Commercial Debts (Interest) Act 1998 applies.

(3) On the application of a representative body, the Court of Session may grant an interdict on such terms as it thinks fit restraining the person from relying on a term in the contract, or engaging in a practice in relation to the contract, where that term or practice relates to—

(a)the date or period for payment of a debt;

(b)the right to interest for late payment of a debt; or

(c)compensation arising out of late payment of a debt,

and in all the circumstances of the case that term or practice appears to the Court of Session to be grossly unfair.]

Saving for existing contractsS

4.  These Regulations do not affect contracts made before 7th August 2002.

LEWIS MACDONALD

Authorised to sign by the Scottish Ministers

St Andrew’s House, Edinburgh

Explanatory Note

(This note is not part of the Regulations)

These Regulations partially implement Directive 2000/35/EC of the European Parliament and of the Council of 29th June 2000 on combating late payment in commercial transactions.

These Regulations (at regulation 2) amend the Late Payment of Commercial Debts (Interest) Act 1998 (c.20) (“the 1998 Act”) by–

(1)  repealing the Scottish Ministers’ power at section 2(5)(c) and 2(6) to specify by order categories of contracts as excepted contracts, in relation to which late payment interest is not to be payable;S

(2)  introducing, at section 2A, provision that the Act shall apply to Advocates’ fees;S

(3)  repealing section 3(4) and (5) which provide that debts do not carry interest if they are specified in an order made by the Scottish Ministers; andS

(4)  introducing, at section 5A, a right to a fixed sum by way of compensation for the costs suffered by suppliers arising from late payment, such sum being based on the size of the debt.S

These Regulations (at regulation 3) provide that a representative body may bring proceedings in the Court of Session on behalf of small and medium-sized enterprises (SMEs) where standard terms put forward by a purchaser in contracts to which the 1998 Act applies include a term purporting to oust or vary the right to statutory interest in relation to debts created by those contracts. The Court may grant an interdict prohibiting use of the term, where it finds that the term is void under the provisions of sections 8 and 9 of the 1998 Act, on such basis as it sees fit.

“Small and medium-sized enterprises” are defined in Annex 1 to Commission Regulation (EC) No. 70/2001 of 12th January 2001 on the application of Articles 87 and 88 of the EC Treaty to State aid to small and medium-sized enterprises. In summary, they are enterprises which have fewer than 250 employees and have either an annual turnover not exceeding _40 Million, or an annual balance sheet total not exceeding _27 Million, and conform to the criterion of independence which in general limits the ownership of such enterprises by other enterprises, falling outside the definition of small and medium-sized enterprises, to 25% of the capital or voting rights.

“Representative body” is defined as an organisation established to represent the collective interests of small and medium sized enterprises in general or in a particular sector or geographical area.

These Regulations (by virtue of regulation 4) do not apply to contracts made before 7th August 2002.

A Regulatory Impact Assessment of the costs and benefits which will result from these Regulations has been prepared by the Scottish Executive Enterprise and Lifelong Learning Department and is available from: Enterprise and Industry Division, Scottish Executive Enterprise and Lifelong Learning Department, Meridian Court, 5 Cadogan Street, Glasgow G2 6AT. Tel 0141 242 5547. Copies have been placed in the Scottish Parliament Information Centre.

These Regulations should be read in conjunction with the Late Payment of Commercial Debts (Interest) Act 1998 (Commencement No. 6) (Scotland) Order 2002 and the Late Payment of Commercial Debts (Rate of Interest) (No. 3) (Scotland) Order 2002.

Back to top

Options/Help

Print Options

Close

Legislation is available in different versions:

Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.

Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.

Close

See additional information alongside the content

Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.

Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.

Close

Opening Options

Different options to open legislation in order to view more content on screen at once

Close

More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources
Close

Timeline of Changes

This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.

Close

More Resources

Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as made version that was used for the print copy
  • correction slips

Click 'View More' or select 'More Resources' tab for additional information including:

  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • links to related legislation and further information resources