New contractor payment law tipped for today

Legislation to let business groups take late payers to court on behalf of their members – such as contractors – will reportedly be introduced today.

Drawn up in wake of 120-day payment terms exposed in the Carillion scandal, the legislation will let trade bodies seek injunctions for contractors who are paid late, the Times reported.

So private companies or public sector departments that leave their suppliers out-of-pocket will risk a legal challenge at the High Court, brought by the supplier’s representative group.

That indicates that the unpaid individual or business won’t have to even attend the hearing, seeming to save them the fallout – financial and otherwise -- of having to fight a big debtor.

The government was yesterday said to be preparing to make the move after it reportedly calculated that the economy would get a £2.5billion boost if contractors were paid on time.

But if passed into law as outlined (the end of the month was cited as the commencement date), the rules would thwart the ‘three strikes approach’ mooted by the late payment tsar.