Late payment is a perennial topic of interest for freelancers. We’ve all experienced it, and all evidence points to it becoming worse than ever, especially where payments from big corporates are concerned. Now Minister for Business and Enterprise Mark Prisk has said that legislation designed to put a stop to late payment (in the form of late payment interest) introduced by the Labour Government “hasn’t worked”, and that the legal right to claim late payment interest is underutilised by freelancers and contractors for fear of being blacklisted and denied future contracts:

“It comes down to the relationship between a small supplier and a larger customer – are you really going to use legislation in those circumstances? It’s unlikely. We’re trying to take a more practical approach and improve relationships.”

He encouraged businesses to sign up to the Prompt Payment Code, a voluntary scheme where companies pledge to pay suppliers within the terms of their contract. Mr Prisk called on all suppliers to name and shame those companies who fail to pay up on time. He was speaking at an event organised by the Forum of Private Business, which has been a vocal supporter of stemming late payment to small businesses, and has kept a late payment “Hall of Shame” on its website for the last few years.

What do you think is the correct approach? Is the legal right to late payment interest beneficial to freelancers and contractors – and have you ever used it? Can a “Hall of Shame” work as an effective deterrant?

Let us know in the comments.

Photo by a2gemma