Ex-post evaluation of Late Payment Directive.
Date: 2015-12-03
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs
Subjects: administrative formalities, competitiveness, directive (EU), payment, small and medium-sized enterprises, trading operation

EX-POST EVALUATION OF LATE PAYMENT 
DIRECTIVE 

ENTR/172/PP/2012/FC – LOT 4 

Written by Valdani Vicari Associati,  
Technopolis Group, Ernst & Young 
November 2015 

 
 
 
     
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROPEAN COMMISSION 

Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs 
Directorate H — COSME Programme 
Unit H1 – COSME Programme, SME Envoys and Relations with EASME 

Contact: GROW-LATE-PAY-E-DESK@ec.europa.eu 

European Commission 
B-1049 Brussels 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROPEAN COMMISSION 

EX-POST EVALUATION OF LATE PAYMENT 
DIRECTIVE  

ENTR/172/PP/2012/FC – LOT 4 

2015 

Directorate H — COSME Programme  
Ex-POST EVALUATION OF LATE PAYMENT DIRECTIVE  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ex-Post Evaluation of Late Payment Directive 

4 

 
 
 
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Luxembourg: Publications Office of the European Union, 2015 

ISBN: 978-92-79-53602-1 
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Reproduction is authorised provided the source is acknowledged. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROPEAN COMMISSION 

Authors:  

Pierre Hausemer 

Julia Rzepecka 

Filippa Lofstrom 

Patrick Eparvier  

Leonor Rivoire  

Claudia Gallo  

Nikos Maroulis   

Date: 20 November 2015 

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Ex-Post Evaluation of Late Payment Directive 

TABLE OF CONTENTS 

1. 

2. 

3. 

4. 

ABSTRACT ........................................................................................................... 6 

EXECUTIVE SUMMARY ........................................................................................... 7 

RECOMMENDATIONS .......................................................................................... 11 

INTRODUCTION ................................................................................................. 13 

4.1.  Objectives ................................................................................................ 13 
4.2.  Scope ...................................................................................................... 13 

5. 

RESEARCH METHODOLOGY .................................................................................. 15 

5.1.  Overview of data collection activities ............................................................ 15 
5.1.1.  Desk research .............................................................................. 15 
5.1.2.  Online Survey .............................................................................. 17 
Interviews at Member State level .................................................... 17 
5.1.3. 
Follow up interviews ...................................................................... 18 
5.1.4. 
5.2.  Overview of the analytical approach ............................................................. 18 

6. 

BACKGROUND, INTERVENTION LOGIC AND STATE OF PLAY ...................................... 20 

6.1.  The problem of late payments ..................................................................... 20 
6.2.  Drivers of late payment .............................................................................. 24 
6.3.  Origin of the Late Payment Directive ............................................................ 24 
6.4. 
Intervention logic ...................................................................................... 26 
6.5.  State of play ............................................................................................. 28 

6.5.1.  MS  regulations  that  are  more  favourable  to  the 

6.5.2. 
6.5.3. 

creditor  28 
Additional national initiatives to combat late payment ........................ 29 
Infringement procedures ................................................................ 33 

7. 

EFFECTIVENESS OF THE DIRECTIVE ...................................................................... 34 

7.1.  Awareness of the Directive .......................................................................... 35 
7.2.  Compensation and interest ......................................................................... 36 
7.3.  Average payment duration in PA2B and B2B transactions ................................ 39 
7.4.  Payment  duration,  payment  delays  and  payment  terms  in  B2B 

transactions .............................................................................................. 41 
Payment duration in B2B transactions .............................................. 42 
7.4.1. 
Payment delays in B2B transactions ................................................ 43 
7.4.2. 
Payment terms in B2B transactions ................................................. 44 
7.4.3. 
7.5.  Payment duration and payment delays in PA2B transactions ............................ 47 
Payment duration in PA2B transactions ............................................ 47 
7.5.1. 
7.5.2. 
Payments delays in PA2B transactions ............................................. 50 
7.5.3.  Regional differences ...................................................................... 52 
7.6.  Wider impacts of the Directive ..................................................................... 52 
7.6.1. 
Liquidity and cash flow .................................................................. 52 
7.6.2.  Cross border transactions .............................................................. 54 
7.7.  Unintended consequences of the Directive ..................................................... 54 

8. 

RELEVANCE OF THE DIRECTIVE ............................................................................ 55 

8.1.  Relevance of the problem of late payment ..................................................... 55 
8.2.  Relevance of the provisions of the Directive ................................................... 56 

9. 

EFFICIENCY OF THE DIRECTIVE ............................................................................ 60 

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9.1.  Costs for businesses as a result of the Directive ............................................. 60 
9.2.  Costs to public authorities ........................................................................... 61 
9.3.  Comparing costs and (potential) benefits ...................................................... 62 

10.  COHERENCE AND COMPLEMENTARITY OF THE DIRECTIVE ........................................ 63 

11.  EU ADDED VALUE OF THE DIRECTIVE .................................................................... 66 

12.  CONCLUSIONS ................................................................................................... 68 

13.  RECOMMENDATIONS .......................................................................................... 71 

14.  ANNEX 1: TRANSPOSITION OF LATE PAYMENT DIRECTIVE IN MEMBER 

STATES ............................................................................................................. 73 

15.  ANNEX 2: DATA COLLECTION AND ANALYSIS ......................................................... 78 

15.1.  Data collection .......................................................................................... 78 

78 

15.1.1.  Survey 
15.1.2.  Interviews at Member State level .................................................... 88 
15.1.3.  Follow-up interviews ..................................................................... 89 
15.2.  Data analysis ............................................................................................ 89 

15.2.1.  Overview  89 
15.2.2.  Regression analysis ....................................................................... 91 

16.  ANNEX 3: CONSULTATION RESULTS ................................................................... 102 

16.1.  Profile of respondents .............................................................................. 102 
 ................................................................................. 102 
16.1.1.  Size 
16.1.2.  Main customers .......................................................................... 102 
16.2.  Main results ............................................................................................ 102 
16.2.1.  Awareness of the rules regulating late payment .............................. 102 
16.2.2.  Average payment terms .............................................................. 103 
16.2.3.  Payment delays .......................................................................... 103 
16.3.  Late payers ............................................................................................ 105 
16.4.  Awareness of rights ................................................................................. 105 
16.5.  Actual actions in case of late payments ....................................................... 106 
16.6.  Difficulties in paying suppliers ................................................................... 107 

17.  ANNEX 4: SURVEY QUESTIONNAIRE AND INTERVIEW GUIDES ................................ 109 

17.1.  Survey questionnaire ............................................................................... 109 
17.2.  Interview guides ..................................................................................... 114 
17.2.1.  Industry associations .................................................................. 114 
17.2.2.  Public authorities ........................................................................ 116 

18.  ANNEX 5: INTERVIEW CONTACTS ....................................................................... 118 

18.1.  Scoping interviews ................................................................................... 118 
18.2.  Interviews at MS level .............................................................................. 118 
18.3.  Follow-up interviews ................................................................................ 120 

19.  ANNEX 6: EVALUATION QUESTIONS ................................................................... 122 

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Ex-Post Evaluation of Late Payment Directive 

List of abbreviations  

ADR –  Alternative Dispute Resolution 
ATA -  Spanish  National 
Associations 

Federation 

of  Self-Employed  Workers' 

NCE -  National Association of Property Developers (Italy) 

AT –  Austria 
BE -  Belgium 
BG –  Bulgaria 

BGN –  Bulgarian Lev 
B2B –  Business to business 

HR -  Croatia 

CEPYME -  Spanish Federation of Small and Medium Enterprises 

CIAA -  Confederation of the food and drink industries of the EU 

CY -  Cyprus 
CZ -  Czech Republic 

CZK -  Czech Republic Koruna 

D –  Deliverable 

DGPYME -  Department for enterprise and SMEs (Spain) 

DK –  Denmark 

DKK -  Danish Krone 
DSO –  Days Sales Outstanding  
GDP –  Gross Domestic Product  
ECB –  European Central Bank  

EE -  Estonia 

EEN -  Enterprise Europe Network 
EUR –  Euro  

EP –  European Parliament  
EPI –  European Payment Index 

FI -  Finland 
FR -  France 
DE -  Germany 
EL -  Greece 
EU -  European Union  
ES -  Spain 

ESCP -  European Small Claim Procedure 
FIEC –  European Construction Industry Federation  
FDII –  Food and Drink Industry Ireland  

HU -  Hungary 
ICM -  Institute of Credit Management (UK) 

IE -  Ireland 

ISME –  Irish Small and Medium Enterprises Association 
ISME -  Indicator for Late Payments 

IT -  Italy 

LEI -  Romanian Leu 
LME -  Loi de modernisation de l’économie 

LV -  Latvia 

LPD –  Late Payment Directive 

LT -  Lithuania 
LU -  Luxembourg 

MCMA -  Maltese Credit Management Association 

MAR -  Missing At Random 
MICE -  Multivariate imputation by chained equations 

MS –  Member State(s) 
MT -  Malta 
NL –  Netherlands 

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NSCC -  National Specialist Contractors’ Council  
PA2B –  Public authority to business  

PL -  Poland 

PLN –  Polish Zloty  

PT -  Portugal 
RO -  Romania 

REFIT -  Regulatory Fitness and Performance Programme 

SBA -  Small Business Act 
SCI –  Supply chain Initiative 
SEK –  Swedish Krona 

SI -  Slovenia 
SK -  Slovakia 

SME(s) -  Small and Medium Enterprise(s) 

SE -  Sweden 

UEAPME -  European Association of Craft, Small and Medium-sized Enterprises 

ToR –  Terms of Reference  

Q –  Question (in the survey) 

VAT –  Value Added Tax  
UK -  United Kingdom 

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Ex-Post Evaluation of Late Payment Directive 

1.  ABSTRACT 

This  is  the  final  report  of  the  evaluation  of  the  Late  Payment  Directive 
2011/7/EU.  The  study  considers  the  following  evaluation  dimensions: 
relevance,  effectiveness,  efficiency,  coherence  and  complementarity,  and 
EU added value. 

The  Directive  continues  to  be  relevant  and  it  is  generally  considered 
efficient  with  significant  value  added  for  industry  stakeholders.  Indeed, 
almost 80% of companies have experienced late payments in the last three 
years. The Directive does not impose any significant costs to businesses or 
public authorities. 

However,  there  is  little  evidence  that  the  Directive  has  had  an  impact  on 
payment behaviour and the practice of late payment to date. Furthermore, 
exercise  of  the  rights  conferred  by  the  Directive  is  not  widespread  due  to 
fear  of  damaging  good  business  relationships.  Rather  than  legislation, 
business culture, economic conditions and power imbalances in the market 
are the driving factors of payment behaviour.  

Nevertheless, the Directive has been successful in bringing the issue of late 
payments  to  the  forefront  of  the  political  agenda  in  Europe.  Several 
Member  States  have  implemented  soft  measures,  which  have  been 
effective in supporting the objectives of the Directive.  

Facilitating  an  exchange  of  best  practices  among  Member  States  could 
enhance  diffusion  of  such  practices  across  the  EU.  In  addition,  further 
guidance on a number of provisions of the Directive would provide clarity, 
which  would  facilitate  application  and  enforcement.  Finally,  harmonised 
measurement  of  the  incidence  and  length  of  late  payments  across  MS 
would permit monitoring of progress in achieving the goals of the Directive.  

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2.  EXECUTIVE SUMMARY 

This document contains the final report of the Evaluation of Late Payment 
Directive  2011/7/EU.  The  study  evaluates  whether  the  main  aim  of  the 
Directive  to  combat  late  payment  in  commercial  transactions  (in  order  to 
ensure the proper functioning of the Internal Market, thereby fostering the 
competitiveness of undertakings) has been achieved, or whether there are 
still  obstacles  that  cause  problems  with  cross-border  transactions  and 
barriers that impede the development and improving of the Single Market. 

The  study  needs  to  take  into  account  the  fact  that  the  Directive  has  only 
recently come into force, which means that some effects and impacts have 
not  yet  materialised.  Thus,  it  focuses  on  the  first  results  of  the 
implementation of the Directive and it assesses whether it is achieving, or 
is on the right track to achieve, its objectives.  

The  study  considers  the  following  evaluation  dimensions:  relevance, 
effectiveness,  efficiency,  coherence  and  complementarity  and  EU  added 
value.  The  study  focuses  on  all  sectors  of  the  economy,  but  special 
attention is paid to the construction, public health and food sectors. 

Context 

Almost three out of four (78%) companies in Europe have experienced late 
payments in the last three years with SMEs likely to be disproportionately 
affected by this phenomenon. Indeed, late payment can lead to insolvency 
and job losses, and it can negatively affect public procurement and cross-
border trade.  

The  drivers  of  late  payment  behaviour  are  multi-faceted  with  the  most 
significant  aspects  being  business  culture/norms,  external  economic 
conditions (e.g. the crisis) and power imbalances in the market.  

State of Play  

In  addition  to  the  LPD,  which  sets  out  minimum  EU-level  measures,  a 
number  of  MS  have 
introduced  stricter  provisions  and  promoted 
complementary initiatives at national level to combat late payment. Among 
these,  prompt  payment  codes  and  specific  sector  initiatives  are  seen  as 
particularly promising.  

At  the  same  time,  thirteen  infringement  procedures  were  launched  so  far 
by the Commission against MS in the context of the LPD. 

Effectiveness  

Almost two thirds of companies are aware of the (general) rules regulating 
late  payments  and  86%  of  companies  know  about  their  right  to  claim 
compensation and/or interest. SMEs and younger firms are less likely to be 
aware of the rules regulating late payment. 

Awareness  of  the  rules,  on  its  own,  does  not  prevent  companies  from 
experiencing  late  payments.  Indeed,  four  out  of  five  companies  that 
experienced  a  late  payment  in  the  last  three  years  were  aware  of  the 
possibility  to  claim  compensation  and/or  interest.  However,  firms  that  are 
aware  of  the  rules  related  to  late  payment  are  less  likely  to  have 
experienced a deterioration of average payment delays over the last three 
years compared to companies that are not aware of the rules. 

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Ex-Post Evaluation of Late Payment Directive 

Despite  relatively  high  awareness  levels,  usage  of  the  provisions  of  the 
Directive is not widespread. 60% of respondents indicated that they never 
exercise  their  rights  to  claim  interest  and/or  compensation  fees  for 
recovery costs. SMEs are much less likely to exercise their rights under the 
Directive than larger companies. 

At  the  same  time,  in  countries  with  a  shorter  average  payment  duration, 
companies  are  more  likely  to  always  exercise  their  rights.  Thus,  in  this 
sense,  the  Directive  seems  to  be  a  more  effective  instrument  for 
companies in countries where the problem of late payment is less severe.  

The  main  reason  for  failing  to  exercise  their  rights  under  the  Directive  is 
the  fear,  among  creditor  firms,  of  damaging  good  business  relationships. 
Lack  of  efficient  remedy  procedures  is  another  barrier  preventing 
companies from exercising their rights to compensation and interest. 

Payment duration has decreased by a small extent in recent years in both 
PA2B  and  B2B  transactions  but  very  significant  differences  remain  across 
countries.  MS  with  above  average  payment  duration  in  PA2B  transactions 
also tend to have above average payment durations in B2B transactions.  

While  it  is  difficult  to  isolate  the  reasons  for  this  progress,  there  is  little 
evidence  that  the Directive has  had  an  impact  on  payment  behaviour and 
the practice of late payment. 

For B2B transactions, average payment duration in the European Union has 
indeed  decreased  from  56  days  in  2011  to  47  days  in  2014.  In  terms  of 
average  payment  delays,  there  has  only  been  a  small  decrease  in  B2B 
transactions  (from  20.5  days  in  2011  to  19.3  days  in  2014).  At  the  same 
time,  there  continues  to  be  significant  cross  country  variation  in  both 
average payment duration and delays. 

Ninety  percent  of  companies  apply  payment  terms  of  60  days  or  less  as 
required  by  the  Directive.  In  addition,  more  than  two  thirds  (70%)  of 
companies  indicate  that  their  payment  terms  do  not  exceed  30  days. 
Country and sector affiliation are more important drivers of payment terms 
than  other  company  characteristics  or  awareness  of  the  rules  around  late 
payment.  Companies  in  manufacturing  and  construction  have  payment 
terms  that  are  on  average  more  than  10  days  longer  than  companies  in 
other sectors.  

As  for  PA2B  transactions,  average  payment  duration  in  the  EU  has 
decreased  (from  65  days  in  2011  to  58  days  in  2014),  but  it  stays  well 
beyond the terms set out by the Directive and 10 MS actually experienced 
an  increase  in  payment  delays  from  public  authorities.  At  the  same  time, 
companies that work primarily with public authorities are less likely to have 
seen  a  deterioration  in  payment  delays  over  the  past  three  years  than 
those that have primarily other businesses as their customers.  

Country  and  sector  effects  are  more  important  drivers  of  payment  terms 
than  any  other  company  characteristics  or  awareness  of  the  rules  around 
late payment. 

Rather than legislation, national business culture, economic conditions and 
power imbalances are the driving factors for payment behaviour.  

There is not yet evidence on the effectiveness of the Directive in terms of 
reducing uncertainty in cross-border transactions.  

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EUROPEAN COMMISSION 

Relevance  

Despite  differences  in  payment  behaviour  across  countries,  industry 
stakeholders  across  all  sectors  agree  that  late  payment  remains  a  highly 
relevant issue.  

In 2009, the results of the Impact Assessment recommended a legislative 
solution  in  the  form  of  a  recast  of  the  former  late  payment  Directive 
(2000/35),  with  stricter  provisions,  to  tackle  the  ongoing  issue  of  late 
payment in commercial transactions. 

This  study  shows  that,  in  order  to  improve  the  relevance  of  the  current 
Directive as a tool to combat late payment, a number of aspects could be 
clarified within the legislation itself. 

First, the definition of what constitutes grossly unfair is seen as ambiguous 
with too much scope for interpretation. 

Second,  there  is  a  lack  of  clarity  regarding  when  the  calculation  of  a 
payment term starts.   

There  are  also  concerns  regarding  recovery  procedures  which  vary  across 
MS. 

Finally, given the multi-faceted nature of the problem, there can be no one 
size  fits  all  legislative  solution  and  the  LPD  can  only  be  one  measure 
among many in the fight against late payment. 

Efficiency  

There are no administrative or reporting burdens resulting directly from the 
Directive.  Indeed,  the  only  direct  cost  to  businesses  as  a  result  of  the 
Directive  relates  to  a  one-off  requirement  for  businesses  having  to 
familiarise themselves with the legislation.  

There are also no regulatory costs stemming from the transposition of the 
Directive. All costs to public authorities as a result of the Directive are one-
off  and,  on  the  whole,  they  are  considered  marginal  by  the  authorities 
themselves. 

Set against these negligible costs, the Directive has the potential to deliver 
significant  benefits,  estimated  at  up  to  EUR  158  million  for  each  one-day 
reduction in payment delays. 

Coherence and complementarity  

There is no evidence of contradictions between the Directive and any other 
EU relevant actions for combating late payment. 

There  are  a  number  of  EU  actions  that  complement  the  objectives  of  the 
Directive such as the European Small Claims Procedure.  

However, in the context of cross-border transactions, there could be some 
overlap  between  the  Directive  (Article  10)  and  the  European  Payment 
Order Procedure. 

EU Added Value  
There is a general consensus among industry and national authorities that 
the  Directive  generates  significant  added  value.  National  authorities  and 
industry suggest that the impacts of the Directive would have been unlikely 
to be achieved by Member States individually.  

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Ex-Post Evaluation of Late Payment Directive 

Despite a few  national  derogations,  the  added  value  lies  in  the  fact  that  - 
to the extent possible – there is now greater uniformity in payment terms 
across the Single Market.  

While the average payment duration in PA2B transactions still exceeds the 
limits set out by the Directive, EU added value lies in ensuring the problem 
of  late  payment  is  high  on  the  political  agenda,  sending  a  message  to 
creditors that the problem is being addressed.  

Related  to  this,  public  authorities  also  highlighted  the  added  value  of  the 
Directive  in  monitoring  improvements  in  payment  duration.  A  common 
measurement  methodology  would  enhance  this  value  added.  Finally, 
though it does not solve the problem on its own, the Directive can provide 
an anchor point for the introduction of effective accompanying measures at 
national  or  sectoral  level  and  for  an  exchange  of  good  practices  between 
Member States.  

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3.  RECOMMENDATIONS  

The  study  has  identified  a  number  of  specific  areas  where  there  could  be 
room for improvement without changing the fundamental characteristics of 
the current legislation. There are two types of recommendations: changes 
related directly to the Directive itself and accompanying measures. 

Recommendations related to the Directive itself 

1.  Clarifying  certain  aspects  of  the  Directive.  This  includes  in 
particular  the  following:    “grossly  unfair”  and  the  calculation  of 
contractual  terms.  Across  various  Member  States  stakeholders 
found  that  the  definition  of  what  constitutes  grossly  unfair  was 
ambiguous  and  left  too  much  scope  for  interpretation.  Similarly, 
there is lack of clarity of the Directive on when the calculation of a 
payment  term  starts.  There  are  different  practices  across  different 
sectors and across the EU. In some instances, the payment term is 
calculated from the issue of an invoice, whereas in other cases the  
payment term starts from the receipt of goods. These aspects could 
be clarified either in a revised text of the Directive or alternatively, 
the  European 
though  a  guidance  document  published  by 
Commission explaining how these elements should be interpreted.  

2.  Assessment  of  the  implementation  of  Article  10  in  all 
Member States. The Directive states that that MS shall ensure that 
an enforceable title can be obtained within 90 calendar days of the 
lodging  of  the  creditor’s  action  or  application  to  a  court,  provided 
that the debt is not disputed. However, the procedures available to 
companies vary across Member States due to different requirements 
in i.e. eligible sums of claim, need for lawyer, and type of procedure 
(i.e. online).  

3.  Changes to the way the interest rate is claimed. At present, it 
is  up  to  the  creditor  to  decide  whether  to  claim  interest  for  late 
payment and this means that even businesses who are aware of the 
rights introduced by the Directive often do not exercise these rights, 
due  to  the  fear  of  damaging  business  relationships.  Automatic 
interest  on  late  payment  would  remove  the  requirement  for  the 
creditor to take the initiative in exercising their right and provide an 
additional incentive for the debtor to pay promptly. 

4.  Increasing  the  minimum  40  EUR  compensation  fee.  The  EUR 
40 compensation fee is seen as not  proportional to the sums owed 
and the costs implied by late payment.  The minimum fee should be 
higher  to  reflect  the  effort  required  in  chasing  and  recovering  late 
payment. A higher compensation fee could encourage businesses to 
claim  their  rights  in  the  short  term  and  contribute  to  changing 
payment culture in the long term.  

External aspects  

1.  Raising  awareness  of  the  impact  of  late  payment.  The 
introduction of the LPD, was accompanied by an EU-wide awareness 
campaign  surrounding  late  payment  rules.  This  study  has  shown 
that  the  main  determinant  of  late  payment  is  not  related  to 
awareness of the rules but to country specific effects (e.g. business 

11 

 
Ex-Post Evaluation of Late Payment Directive 

culture).  Rather  than  focusing  on  rules  and  legislation,  a  future 
awareness campaign should focus on the impact of late payment on 
businesses,  with  the  aim  of  making  late  payment  a  “socially 
unacceptable” practice in all MS.  

2.  Fostering  the  development  and  implementation  of  prompt 
payment  policies  in  all  MS.  The  study  has  shown  that  prompt 
payment  policies/codes  in  the  public  and  private  sectors  are  an 
effective way to shorten payment duration. The Commission should 
take  active  steps  to  support  all  MS  in  developing  such  schemes  as 
accompanying  measures  to  the  LPD.  This  would  entail  developing 
the  “business  case”  for  the  creation  of  prompt  payment  policies, 
drawing  on  the  experiences  of  countries  that  have  implemented 
such  schemes  (see  also  the  recommendation  below)  and  engaging 
with  sectoral  associations  and  MS  authorities  to  promote  the 
implementation of prompt payment schemes.  

3.  Facilitating  the  exchange  of  best  practices  though  peer 
review  workshops.    Since  the  Directive  has  introduced  the 
possibility for MS to introduce voluntary measures, other MS would 
welcome  more  information  regarding  the  effectiveness  of  these 
measures. “Peer review” type workshops involving public authorities 
and experts from all EU MS could be organised in specific MS which 
are  taking  (or  intend  to  take)  an  active  approach  to  tackling  late 
payment.  In  this  way,  policy  officers  from  different  departments 
could  share  their  experiences  with  Member  States  lacking  a 
coordinated approach.  

4.  Providing  access  to  effective  remedies.  In  the  presence  of 
lengthy  juridical  procedures  an  effective  system  of  ADR  should  be 
provided at the national level. Of importance is the European Small 
Claims  Procedure  which  provides  a  fast  and  efficient  way  of 
recovering  debt,  but  is  not  often  used  by  companies.  One  of  the 
reasons for this seems to be the relatively low sum.  

5.  Monitoring  progress  -  The  Directive  is  silent  regarding  how  to 
measure  late  payment.  Such  harmonised  measurement  would 
facilitate  the  provision  of  up  to  date  statistical  data  and  it  would 
allow cross-country comparison over time. 

12 

 
 
 
EUROPEAN COMMISSION 

4.  INTRODUCTION  

This report presents the findings, conclusions and recommendations of the 
Evaluation of Late Payment Directive (2011/7/EU, LPD – the Directive). 

4.1.  Objectives 

The study assesses the first results of the implementation of the Directive 
in  the  EU-28  across  all  sectors,  specifically  its  effectiveness,  efficiency, 
relevance, coherence, and EU added value.  

According to Article 11 of the LPD, the European Commission is required to 
submit  a  report  to  the  European  Parliament  and  the  European  Council  on 
the  implementation  of  the  Directive  by  16  March  2016.  The  results  of  the 
present study will help prepare this report.  

However,  the  study  needs  to  take  into  account  the  fact  that  the  Directive 
has only recently come into force (the transposition deadline was 16 March 
2013),  which  means  that  some  anticipated  effects  and  impacts  have  not 
yet  materialised.  Thus,  the  study  focuses  on  the  first  results  of  the 
implementation of the LPD and assesses whether it is on the right track to 
achieve  its  objectives.  This  evaluation  will  help  determine  whether  the 
provisions  provided  by  the  Directive  are  being  used  (effectively)  and 
whether their use has started to generate the expected results. 

4.2.  Scope 

The scope of this study includes: 

  Legislation: Late Payment Directive 2011/7/EU  

  Time  period:  since  the  date  of  the  adoption  in  each  single 

Member State 

  Geography: European Union (EU) - 28 

  Sectors:  all  sectors  but  with  a  focus  on  construction,  public 

health and food  

  Stakeholders:  primary  data  are  partly  sourced  from  public 
authorities  but  mainly  from  businesses  established  in  the 
European  Union  (target  group  of  the  Directive)  and  their 
representatives,  with  a  particular  focus  on  Small  and  Medium 
Enterprises (SMEs)  

Box 1 - A note on terminology 

When looking at the impact and effects of the Directive, it is important to 
keep  in  mind  the  difference  between  payment  terms,  delays,  and 
durations.  

  Payment term is the time period set out in the contract, and agreed 
by the two parties. It is thus the period allowed for a buyer to pay off 
the amount due; 

  Payment delay is the period starting after the due date according to 

13 

 
 
 
 
Ex-Post Evaluation of Late Payment Directive 

the contract (payment term), until the payment is received; 
  Payment duration is the total period of time required for the 

payment to reach the creditor, i.e. from the beginning of the payment 
term until the payment is received (total sum of payment term and 
potential delay).  

The figure below visualises the difference between these concepts: 

Changes  in  payment  terms,  payment  durations  and  payment  delays  are 
important indicators in in the context of this study since the Directive sets 
out provisions relating both to payment terms and to payment delays. 

14 

Payment duration (payment term + delay)Payment term (e.g. contractual)Payment delaytimetime 
 
 
 
 
 
 
 
EUROPEAN COMMISSION 

5.  RESEARCH METHODOLOGY  

This  section  outlines  the  research  methodology  applied  throughout  the 
study. 

Box 2 - Key points of this chapter 

  Data  collection  for  this  study  consisted  of  a  combination  of  desk 
research,  an  online  survey  with  a  representative  sample  of 
enterprises and interviews with public authorities, enterprises and 
sector representations in all 28 Member States.  

  Data analysis activities included descriptive evaluations of existing 
data, a qualitative analysis of interview results and an estimation 
of several regression models based on the survey data.  

5.1.  Overview of data collection activities  

In  order  to  answer  the  evaluation  questions,  the  data  collection  plan  was 
structured around the following activities: 

  Desk research 
  Online survey 
 
  Follow up interviews 

Interviews at Member State level 

5.1.1.  Desk research 

While desk  research covered all sectors,  there was  a specific focus on the 
health,  construction  and  food  sectors.    The  research  was  conducted  in 
three steps: 

1.  National laws were scrutinised to identify  those more favourable to 

the creditor than required in the Directive.  

2.  National  sources  of  information  on  average  payment  duration  and 
delays,  impacts  on  economic  growth  and  employment  were 
assessed. Due to the recent adoption of the Directive, there are no 
studies  on  the  impacts  of  the  LPD  or  corresponding  national 
legislation.  This  lack  of  secondary  data  means  that  primary  data 
collection  (i.e.  interviews  and  survey)  was  key  to  assessing  the 
impacts of the Directive. 

3.  Information  regarding  any  additional  measures  (mandatory  or 

voluntary) at national level was identified and analysed. 

At European level, the most comprehensive data to date is collected in the 
European  Payment  Index  (EPI).  While  this  report  makes  extensive  use  of 
these data, it is important to be aware of several caveats in relation to the 
EPI, namely:  

  The EPI (up to 2014) is based on the responses of 6,000-10,000 
companies across Europe. Since the sample can vary from year 
to year, this might affect findings on the potential scope of late 
payment  trends  in  some  Member  States.  The  Payment  Index  is 

15 

 
 
 
 
 
Ex-Post Evaluation of Late Payment Directive 

calculated from eight differently weighted sub-indices, which are 
based on a total of 21 individual values.  

  Not  all  EU  Member  States  are  covered  in  the  Index.  Data  from 
Luxembourg  and  Malta  are  missing  and  some  Member  States 
such  as  Bulgaria,  Croatia,  Romania  and  Slovenia  are  only 
covered from 2012 or 2013 onwards.  

  Pan-European  average  figures  available  in  the  Index  report  are 
not (entirely) relevant for this study. These figures are based on 
data  from  26  EU  Member  States  and  other  countries  including 
Bosnia-Herzegovina,  Norway,  Russia,  Serbia,  Switzerland  and 
Turkey.  

  EPI  2015  followed  a  different  methodology  than  previous  years 
making  a  historical  comparison  impossible.  Changes  include 
adjustments  and  improvements  to  the  weighting  of  data  and 
sample  size  was  increased  by  about  10  percent  in  2015.  As  a 
result  of  these  changes,  no  historical  comparison  should  be 
drawn between 2015 and previous years. 

In addition to the EPI, other cross-country data used in this report include: 
  EOS  -  “European  Payment  Practices”  asked  2,600  companies  in 
12  European  countries  about  payment  practices  in  their 
respective  countries.  200  companies  in  each  of  the  following 
countries  UK,  Spain,  France,  Austria,  Greece,  Romania,  Russia, 
Slovakia,  Bulgaria,  Poland  and  Belgium,  and  400  companies 
from  Germany,  answered  questions  about  their  own  payment 
experiences,  economic  developments  in  their  countries  and  on 
issues  relating  to  risk  and  receivables  management.  These 
results were used throughout the report, but it should be noted 
that EOS averages include non-EU countries.1  

  Atradius  -  Atradius  conducts  annual  reviews  of  international 
corporate  payment  practices  through  a  survey  called  the 
“Atradius  Payment  Practices  Barometer”.  This  report  presents 
the  results  of  the  survey’s  2015  edition  conducted  in  13 
countries  across  Western  Europe  based  on  a  sample  of  2,713 
interview 
research 
in 
methodology no year-on-year comparison is feasible. 

respondents.  Due 

to  a  change 

  Euler  Hermes  Country  Reports  present  economic  profiles  of 
individual  countries,  including  sections  on  economic  strengths 
and  weaknesses,  country  rating  based  on  country  grade  and 
country  risk  level,  main  activity  sectors  and  trade  partners, 
economic  forecasts  and  more.  Relevant  information  from  these 
reports, was used throughout the report. 

  Grant  Thornton's  "European  Business  Survey"  is  a  survey  of 
6,000  European  companies, which  provides  a  comparative 
analysis  of  the  opinions  of  small  and  medium-sized  enterprises 
in  17  European  countries  on  a  wide  range  of  issues  relevant  to 
their  competitiveness.  The  Grant  Thornton  survey  results  were 
derived  from:  Conway  L.  (1997):  Late  Payment  of  Commercial 
Debt, Research Paper 97/25, 12 February 1997. 

1  Quoted  random  sample  according  to  revenue  and  sector,  results  for  Germany  weighted. 
Country data integrated into overall result with same weighting. (2014: https://www.eos-
solutions.com/fileadmin/user_upload/studies/2014_Zahlungsgewohnheiten/20140606_EO
S_Zahlungsgewohnheiten_2014_final_ENG.pdf) 

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EUROPEAN COMMISSION 

5.1.2.  Online Survey 

Given  the  above  limitations  in  terms  of  secondary  data,  the  company 
survey was a key element of this study.  

The  objective  of  the  survey  was  to  collect  primary  data  from  a 
representative sample of companies across all Member States regarding: 

  Awareness of late payment regulations; 
  Payment terms applied by companies; 
  Experience of delays by other companies/public authorities; 
  Awareness and exercise of the provisions in the directive; and 
 

Impact of late payments on companies. 

targeted  companies  was  developed 

The  sample  of 
to  ensure 
representativeness  in  terms  of  the  European  industrial  structure (different 
strata  were  created  for  company  size  and  country  group).  Details  on  the 
survey sample can be found in annex 3.  

Finally,  due  to  demand  by  industry  associations,  a  version  of  the  online 
survey was made available to the general public from June 2 to July 19 in 
the  form  of  a  public  consultation.  European  and  national  industry 
associations were provided links to this consultation to be shared with their 
members.  273  responses  were  received  in  this  open  consultation.  Due  to 
the  representative  nature  of  the  company  survey,  it  is  important  to 
maintain  the  integrity  of  the  sample  of  survey  respondents.  Hence  it  was 
not  possible  to  merge  survey  and  consultation  results.  However,  the 
consultation  does  provide  interesting  corroborating  information  to  the 
survey and its results are described in Annex 3. 

5.1.3.  Interviews at Member State level 

The  objective  of  the  interviews  was  to  gain  a  richer,  in-depth  qualitative 
understanding of the issues faced by businesses in terms of late payment.  

Overall  135  telephone  interviews  with  companies,  industry  and  sector 
associations were conducted.  

  111 business representatives were interviewed, including chambers 
of  commerce,  sector  associations,  SME  associations,  European 
Enterprise  Network  members,  or  general  business  associations. 
Given the focus of the study on construction, public health and food 
sector, the team focused on these three sectoral associations.  

 

 

Interviews  with  22  public  authorities  collected  key  information 
regarding transposition measures.  

In  2  cases  (in  Croatia  and  in  Spain)  individual  experts  on  late 
payment were interviewed. 

These  interviews  included  2  round  table  discussions  -  one  in  London  and 
one  in  Brussels.  18 organisations  (11  national  industry  associations  and  7 
companies) were present at these meetings.  

17 

 
 
 
 
Ex-Post Evaluation of Late Payment Directive 

Annex  5  provides  the  names  of  the  organisations  that  were  consulted 
during  the  study  as  well  as  a  breakdown  of  stakeholders  by  country  and 
type of organisation.2 

5.1.4.  Follow up interviews  

Finally,  following  closure  of  the  survey,  31  follow-up  interviews  with 
companies  took  place  between  June  and  September  2015.  The  follow  up 
interviews focused on the responses provided in the questionnaire and the 
study  team  aimed  at  discussing  the  costs  incurred  by  companies  due  to 
late payment. For this reason, the study team contacted companies which 
indicated  awareness  of  the  possibility  to  claim  interest  and  compensation 
(Q17  of  the  survey),  experience  with  claiming  interest  or  compensation 
(Q18 of the survey) and other activities undertaken in case of late payment 
(Q20  of  the  survey).  Annex  5  has  a  list  of  companies  that  participated  in 
follow-up interviews. 

5.2.  Overview of the analytical approach 

It is very difficult to directly attribute changes in payment duration, terms 
or  delay  over  time  to  the  Directive.  There  are  indeed  a  large  number  of 
intervening factors, such as the impact of the financial crisis, national and 
sectoral  differences,  business  culture  and  social  norms,  which  make  it 
impossible  to  quantify  the  direct  impact  of  the  Directive  on  payment 
behaviour.    In  addition,  the  Directive  was  only  implemented  recently  and 
its effects have not yet fully materialised.  

This study is therefore a first step to establish the état des lieux regarding 
payment  behaviour  following  the  implementation  of  the  Directive,  to 
understand  the  direction  of  travel  in  the  key  variables  that  the  Directive 
aims to influence and to identify key drivers and obstacles with respect to 
improving payment behaviour in B2B and PA2B transactions.   

No single analytical method could deliver all of the objectives of this study. 
Hence,  in  addition  to  a  descriptive  survey  analysis  (i.e.  cross-tabs)  and 
extensive  qualitative  analysis  of 
findings,  a  multivariate 
regression  analysis  based  on  survey  data  was  conducted  to  identify 
explanatory  factors  related  to  different  dimensions  of  late  payment. 
Regression  analysis  allows  to  examine  the  statistical  significance  and  the 
relative  magnitude  of  the  impact  of  different  factors  on  a  dependent 
variable or on the probability of occurrence of an event.  

interview 

As a result, though it stops short of enabling the study to directly attribute 
impacts to the Directive, the regression complements and – indeed - adds 
significant  value  to  the  descriptive  bi-variate  survey  analysis  and  the 
qualitative information gathered through interviews.  

Different  regression  model  specifications  were  estimated  to  identify  inter 
alia:  

  What factors explain awareness of the rules regulating late 

payments across European countries;  

2  30  organisations  declined  participation  in  interviews  for  various  reasons  including:  lack  of 

data/information/opinion/human resources. 

18 

 
 
 
                                                 
EUROPEAN COMMISSION 

  Which types of companies are more likely to experience late 

payments;  

  Which types of companies are more likely to exercise their rights 

under the Directive;  

  What factors increase the probability of companies facing 
difficulties to pay within contractually agreed terms; and  
  What factors explain payment terms applied by companies?  

Age,  size,  turnover  of  the  company  (%  in  own  country)  and  type  of 
customer were used as explanatory factors when performing the analysis. 
Dummy variables for each country and sector were also included to control 
for country specific impacts (business culture, regulatory framework, etc.) 
and sector heterogeneity.  

Results  and  conclusions  should  be  approached  with  some  caution  as  self-
reporting  of  late  payment  experiences  and  behaviours  related  to  late 
payment  can  be  subject  to  mis-reporting,  particularly  since  the  survey 
questionnaire  asked  for  late  payment  experiences  over  a  period  of  three 
years.  Furthermore,  additional  non-observed  factors  are  not  taken  into 
account  in  the  model.  However,  non-observed  factors  that  are  related  to 
country  or  sector  characteristics  are  captured  by  the  corresponding  fixed-
effect variables. 

Full details of the regression methods and the results are in Annex 2.  

19 

 
 
 
Ex-Post Evaluation of Late Payment Directive 

6. 

 BACKGROUND, INTERVENTION LOGIC AND STATE OF PLAY 

This  section  outlines  the  main  issues  associated  with  late  payment  across 
the  EU  as  well  as  the  political  context  prior  to  the  implementation  of  the 
Directive.  

Box 3 - Key points of this chapter 

  Almost  three  out  of  four  (78%)  companies  in  Europe  have 

experienced later payments in the last three years. 

  SMEs  are  likely  to  be  disproportionately  worse  affected  by  late 

payments. 

  Late  payment  can  lead  to  insolvency  and  job  losses,  and  it  can 

negatively affect public procurement and cross-border trade.  

  The  drivers  of  late  payment  behaviour  are  multi-faceted  with  the 
most  significant  aspects  being  business  culture/norms,  external 
economic  conditions  (e.g.  the  crisis)  and  power  imbalances  in  the 
market.  

 

In addition to the LPD which sets out minimum EU-level measures, a 
number  of  MS  have  introduced  stricter  provisions  and  engaged  in 
complementary national level initiatives to combat late payment.  

  Among  these,  prompt  payment  codes  and  specific  sector  initiatives 

are seen as particularly promising.  

  Thirteen  infringement  procedures  were  launched  so  far  by  the 

Commission against MS in the context of the LPD. 

6.1.  The problem of late payments 

Almost  three  out  of  four  (78%)  companies  in  Europe  have 
experienced  late  payments  in  the  last  three  years.  The  figure  below 
shows  that  in  most  countries  more  than  half  of  survey  respondents  had 
experienced late payments over this period. However, there are significant 
variations across countries. While 90% of respondents in Greece, Malta and 
Slovakia  reported  experience  of  late  payments,  the  equivalent  figure  was 
only 33% in the UK and 38% in Germany.  

20 

 
 
 
 
 
EUROPEAN COMMISSION 

Figure  1.  Share  of  survey  respondents  that  experienced  late 
payments in the last three years (%)  

Source: company survey  

Working  capital  management  is  a  crucial  factor  in  individual  firm 
performance.3  Working  capital  ensures  that  firm  have  sufficient  funds  to 
cover  their  short  term  financial  obligations  and  to  continue  operating. 
Accounts  receivable  (i.e.  the  management  of  the  firm’s  debtors)  and 
accounts  payable  (i.e.  the  management  of  the  firm’s  creditors)  are  two 
important elements of working capital (alongside inventories and cash). 

The  use  of  trade  credit,  (where  a  product  or  service  is  delivered 
today but only paid for at a later stage) is widespread in Europe. As 
Paul  and  Boden  find  in  their  2011  article  on  late  payments  in  the  UK, 
« trade credit is a prominent part of the UK trading environment, where at 
least  80  per  cent  of  business-to-business  transactions  are  on  credit ». 
Furthermore,  many  SMEs  are  not  able  to  pay  their  suppliers  before  they 
are paid by their customers, owing to liquidity constraints, and might thus 
end up paying late4. 

Given  the  importance  of  accounts  receivable/payable  for  firm 
performance  and  the  extensive  use  of  trade  credit,  it  is  clear  that 
late payment is a crucial determinant of enterprise survival. Indeed, 
Wilson (2008) reports that working capital management and late payment 
problems  are  a  primary  cause  of  small  business  failure.5  This  is  because 
late  payments  negatively  affect  cash  flow,  and  add  financial  costs  and 
uncertainty  for  creditors.  The  financial  crisis  has  further  constrained  cash 

3  Paul,  S  and  Boden,  R  (2001):  Size  matters:  the  late  payment  problem,  Journal  of  Small 

Business and Enterprise Development Vol. 18 No. 4, 2011 pp. 732-747. 

4 Ibid.  
5  Wilson,  N.  (2008):  An  Investigation  into  Payment  Trends  and  Behaviour  in  the  UK:  1997-

2007, CMRC Centre, Leeds University Business School, Leeds. 

21 

 
 
                                                 
Ex-Post Evaluation of Late Payment Directive 

flow  thus  amplifying  the  importance  of  prompt  payment  for  a  speedy 
economic recovery.6 

Moreover, SMEs are likely to be disproportionately affected by late 
payments because:  

1.  they  may  not  have  easy  access  to  finance  to  cover  any  temporary 

shortfalls,  

2.  such finance  – where it is available  - may be more expensive than 

for larger companies, and  

3.  they  do  not  always  have  appropriate  credit  management  systems 

for preventing or managing late payments. 

It  is  thus  not  surprising  that,  at  EU  level,  the  proportion  of  firms 
identifying late payment as a barrier increases with the decreasing 
size  of  the  firm,  with  47%  of  micro  firms  against  35%  of  big  firms 
identifying  late  payment  as  a  barrier.7  This  goes  so  far  that  SMEs  in  the 
UK,  prior  to  introduction  of  national  legislation  on  late  payments, 
“considered the introduction of statutory penalties to curb late payment the 
most  important  factor  associated  with  improving  the  performance  of  their 
business”8.  

In  addition,  issues  related  to  late  payments  extend  beyond  the 
impact on directly affected companies to public services, employment, 
and the internal market. 

1.  Late  payment  imposed  on  businesses  by  public  authorities  can 
discourage  participation  in  public  procurement  contracts  which,  in 
turn,  prevents  public  authorities  from  getting  the  best  value  for 
taxpayers’ money. 

2.  From a social point of view, late payment increases uncertainty 
for  many  creditors  and  may  impact  employment  strategies. 
For  example,  in  Germany,  35%  of  companies  indicated  that  late 
payment  had  a  strong  impact  on  the  need  to  lay  people  off 
(similarly  30%  in  the  UK,  28%  in  Spain  and  25%  in  France)9.  On 
average  40%  of  European  business  managers  said  late  payment 
contributed  to  them  not  hiring,  while  one  out  of  four  European 
companies said the consequences of late payment included job cuts. 
The  figure  below  shows  the  share  of  managers  across  the  EU  who 
believe that late payment has an impact on redundancies.  

6 More information can be found at: http://ec.europa.eu/economy_finance/publications 

/economic_ paper/2014/pdf/ecp531_en.pdf 

7  DG  Enterprise  and  Industry  (2010):  Evaluation  of  SMEs'  access  to  public  procurement 

markets in the EU. 

8 Peel, M.J., Wilson, N. and Howorth, C. (2000), “Late payment and credit management in the 
small firm  sector: empirical  evidence”, International Small Business  Journal, Vol. 18  No. 
2, pp. 17-37. 

9 Ibid. 

22 

 
 
 
 
                                                 
EUROPEAN COMMISSION 

Figure  2.  Management  perceptions  of  the  impact  of  late 
payment on redundancies - % of respondents 

Source: Intrum Justitia, EPI (2014) 

3.  An  Intrum  Justitia  report  found  that  36%  of  businesses  believed 
that  their  very  survival  was  being  threatened  by  late  payment10. 
Indeed,  insolvencies are estimated to lead to  the  loss of 450,000 
jobs  each  year  in  the  EU  and  outstanding  debts  of  EUR  23.6 
billion11.  

4.  Late  payments  may  also  have  a  negative  impact  on  the 
functioning  of  the  internal  market  and  cross-border  trade. 
Many  businesses  consider  cross-border  trade  with  businesses  or 
public authorities from other Member States more risky in terms of 
the frequency of late payments and the uncertainty on how to deal 
with  late  payers.  As  a  consequence,  companies  may  refrain  from 
cross-border trade to the detriment of the functioning of the internal 
market. 

Ultimately,  late  payment  can  lead  to  insolvency.  According  to  the 
European  Commission,  insolvencies  lead  to  the  loss  of  450,000  jobs  each 
year in the EU and outstanding debts of EUR 23.6 billion12. Focusing on the 
issue  of  bad  debt  only,  Intrum  Justitia13  reported  that  in  2014  total  bad 
debt  losses  for  European  businesses  had  risen  from  3.0  to  3.1%  of 
revenues, roughly equalling the cost of 8 million jobs.  

10 Ibid. 
11 The Slovak Spectator, http://spectator.sme.sk/c/20046312/tackling-late-payments.html 
12  European  Commission  (2012):  Avoiding  bankruptcy  by  tackling  late  payments,  Press 

release, published on: 05/10/2012 

13 Intrum Justicia, EPI 2014 

23 

 
 
 
 
                                                 
Ex-Post Evaluation of Late Payment Directive 

6.2.  Drivers of late payment  

While  late  payment  behaviour  is  a  multi-faceted,  complex  phenomenon, 
there  are  three  key  drivers  that  explain  differences  in  the  experience  of 
late payments across sectors, countries, and over time.  

First, in the 2015 EOS survey the current economic situation is cited as 
the reason for late payment for one in five companies in 2014, and one in 
four  companies  in  2015.  Consultation  with  industry  confirms  that  the 
general  economic  climate  was  a  factor  that  heavily  influenced  payment 
behaviour. 

Second,  the  prevailing  business  culture  is  another  key  explanatory 
factor  for differences  in  the  prevalence  of  late  payments across countries. 
In some countries intentional non-payment is common in B2B transactions 
and it is still exercised by almost one out of five companies. Evidence from 
consultation  with  industry  shows  that  Southern  MS  such  as  Spain,  Italy, 
Portugal,  Greece  which  historically  have  had  higher  average  payment 
duration  and  delay  are  perceived  as  countries  where  late  payment  is 
standard  business  behaviour.  In  contrast,  in  Nordic  countries  such  as 
Denmark, Sweden or Estonia, late payment is not seen as a major problem 
as  these  Member  States  had  traditionally  a  good  payment  culture 
motivating companies to comply with contractual payment terms.  

Third, power imbalances in the supply chain is another primary cause of 
late payment, whereby more powerful actors impose long payment periods 
on smaller suppliers. In fact, the Impact Assessment for the Late Payment 
Directive  noted:  “the  level  of  competition  within  a  market,  the  market 
power  of  market  participants  and  the  corresponding  fear  of  harming 
commercial  relationships  with  clients  are  important  factors  determining 
whether creditors accept or refuse late payment and whether debtors seek 
an  extension  of  the  period  of  trade  credit”14.  Of  course,  the  Directive  has 
not had any impact on these market structures. Larger firms can continue 
to  impose  the  payment  terms  they  wish,  as  smaller  businesses  fear 
retaliation or a potential end to the seller-buyer relationship.  

From  the  supplier’s  point  of  view,  tolerating  late  payment  against  the 
promise  of  future  business  is  often  a  rational  choice  –  as  is  forbearance 
when  a  customer  is  facing  difficulties.  This  combination  of  incentives 
makes  it  very  hard  for policymakers  to  tackle  late  payment; and  in 
economic downturns or less developed markets the case for tolerating late 
payment  becomes  stronger.  Armed  with  better 
information  and 
occasionally  more  influence  over  their  trading  partners,  suppliers  can 
actually be more effective sub-prime lenders than the banking sector15.  

6.3.  Origin of the Late Payment Directive 

In  response  to  the  above  concerns,  the  European  Commission  has 
made a number of efforts over the past years to address the issue 

14  European  Commission  (2009):  Commission  Staff  Working  Document  accompanying 
document  to  the  Proposal  for  a  Directive  on  combating  late  payment  in  commercial 
transactions  (recast)  –  Impact  assessment  {COM(2009)  126  final}  {SEC  (2009  316}; 
hereinafter ‘the EC Impact assessment’. 

15 ACCA: Ending late payment PART 3: Reflections on the Evidence 

24 

 
 
 
                                                 
EUROPEAN COMMISSION 

of late payment. Following Commission recommendations in 1995 and in 
1997,  the  first  Directive  on  late  payment  was  adopted  in  2000  (Directive 
2000/35/EC).  As  noted  in  2006  by  Hoche16,  a  few  years  after  the 
introduction  of  this  Directive,  there  had  been  a  decrease  in  the  average 
payment time in the EU, but there was a significant difference between EU 
Member  States  and  between  sectors.  Furthermore,  public  administrations 
had demonstrated to be the slowest payers.  

Based  on  these  considerations,  in  2009  the  European  Commission  carried 
out an impact assessment to assess the following policy options for tackling 
late payment: 

  Harmonisation  of  periods  of  payment  by  public  authorities  to 

business; 

  The abolition of the EUR 5 threshold17; 
  The introduction of a “Late Payment Fee”; and 
  The introduction of a “Late Payment Compensation”.  

Following  inter-institutional  negotiations,  the  Commission  adopted  a 
legislative  proposal  which  resulted  in  Directive  2011/7/EU.  Directive 
2011/7/EU on combating late payment in commercial transactions replaced 
the  earlier  Late  Payment  Directive  2000/35/EC.    The  terms  of  the  revised 
Directive  needed  to  be  transposed  into  national  law  of  all  EU  Member 
States by 16 March 2013. 

The main provisions of the Directive include: 

  Harmonisation of period for payment by public authorities 
to  businesses:  Public  authorities  have  to  pay  for  goods  and 
services that they procure within 30 days or, in very exceptional 
circumstances, within 60 days. 

  Contractual 

freedom 

commercial 
in 
transactions:  Enterprises  have  to  pay  their  invoices  within  60 
days,  unless  they  expressly  agree  otherwise  and  provided  it  is 
not grossly unfair. 

business’ 

  Businesses are entitled to claim interest for late payment 
and are also able to obtain a minimum fixed amount of EUR €40 
as  a  compensation 
for  recovery  costs.  They  can  claim 
compensation for all remaining reasonable recovery costs. 

  The statutory interest rate for late payment in the Member 
States should be increased to at least 8 percentage points above 
the  European  Central  Bank’s  reference  rate.  Public  authorities 
are  not  allowed  to  fix  an  interest  rate  for  late  payment  below 
that figure. 

  Member  States  shall  ensure  that  recovery  procedures  for 
undisputed  claims  are  available  so  that  an  enforceable  title 
can  be  obtained  within  90  calendar  days  of  the  lodging  of  the 
creditor’s action or application to a court. 

16 Hoche (2006): Review of the effectiveness of European Community legislation in combating. 
17 The Directive 2000/35/EC specified that Member States may exclude claims for interest of 

less than €5 [Article 6.3(c)]. 

25 

 
 
 
                                                 
Ex-Post Evaluation of Late Payment Directive 

6.4.  Intervention logic 

The  general  objectives  of  the  Directive  are  to  contribute  to  the 
development  and  improvement  of  the  Single  Market,  and  to 
improve  European  competitiveness.  The  Directive  also  aims  to 
eliminate barriers to cross-border commercial transactions.  

By  introducing  contractual  payment  terms,  the  Directive  aims  to 
discourage  long  payment  periods  and  late  payment  but  also  to 
enable creditors to exercise their rights when they are paid late. To 
achieve  these  objectives,  the  LPD  sets  out  a  range  of  measures  including 
harmonised  rules  for payment  periods,  increased  transparency  on  interest 
to be paid by late payers and compensation rights for companies that are 
paid late. 

These  measures,  in  turn,  should  improve  the  cash  flow  of  European 
commercial 
enterprises, 
transactions  in  the  EU,  reduce  cost  to  businesses  and  SMEs  in 
particular, thus reducing bankruptcy rates.  

remove  barriers 

cross-border 

to 

Finally,  these  results  –  if  achieved  –  should  have  the  following  impacts, 
reflecting the general objectives stated at the outset: positive impact on 
growth  and  employment,  integration  of  the  single  market  and 
improved  financial  stability  and  competitiveness  of  the  EU 
economy.  

The  structure  of  the  intervention  logic  is  visualised  in  the  figure  overleaf. 
The detailed list of evaluation questions can be found in Annex 6. 

26 

 
 
Evaluation of Late Payment Directive  

Figure 3. Intervention logic 

02/12/2015 

Page 27 of 132 

 
 
 
 
 
 
 
 
 
Ex-Post Evaluation of Late Payment Directive 

6.5.  State of play  

6.5.1.  MS regulations that are more favourable to the creditor 

A  small  number  of  countries  have  brought  into  force  provisions  that  are 
more  favourable  to  the  creditor  than  those  necessary  to  comply  with  the 
minima  set  out  in  the  Directive.  Variants  include  e.g.  a  higher  interest  rate, 
capped  payment  terms,  and  the  option  not  to  use  the  exception  for  public 
institutions providing healthcare. 

6.5.1.1.   Stricter national provisions  

A  limited  number  of  countries  have  adopted  stricter  provisions  with  regards  to 
payment terms.  

In  Sweden  and  Denmark  the  national  legislations  transposing  the  Directive 
introduced stricter provisions, which imply that the longer the payment term is, the 
more  likely  that  a  court  will  consider  it  to  be  grossly  unfair.  In  both  countries,  if 
payment terms in a B2B transaction exceed 30 days, this must be agreed in writing 
by  the  two  parties.  Furthermore,  under  Swedish  law,  businesses  may  explicitly 
agree on a longer payment term, but the parties also need to agree on a payment 
plan  over  which  the  debt  is  paid  by  instalments.  The  consulted  public  authority  in 
Sweden  mentioned  that  in  regards  to  the  expression  “grossly  unfair”,  Sweden 
actually  opted for the stricter term “unfair”.  Paragraph 36 of the Swedish contract 
law establishes that while investigating unfair contract terms, specific consideration 
should  be  given  to  protect  the  party  which  is  in  the  weaker  position  in  a business 
relationship. In Sweden, sector associations have the possibility of bringing a case 
to the market court to prevent unfair conditions in future contracts. 

The  maximum  payment  terms  for  public  authorities  in  Denmark  are  set  at  30 
days,  however,  they  can  be  extended  to  up  to  60  days  by  executive  order.  As  in 
Sweden, the payment terms for public authorities are set at 30 days, but specific 
contractual  agreements  can  be  made  on  the  condition  that  a  payment  plan  is 
established.  In  both  countries,  these  arrangements  can  be  made  by  all  types  of 
PAs, not only in the health sector. 

In  France  -  the  LME  (loi  de  modernisation  de  l’économie)  provides  for  maximum 
payment  terms  in  B2B  transactions  of  60  days  or  45  after  the  end  of  the  month. 
The  latter  term  means  that  a  payment  could  be  as  long  as  75  days  depending  on 
the date of the specific invoice, as long as this is expressly agreed in the contract 
and provided it is not grossly unfair to the creditor. Exemptions to the 60 day cap 
are not authorised (except where the parties have chosen the 45 days from the end 
of the month period).  

Furthermore, new legislative measures were introduced in France at the beginning 
of  2015.  These  measures  include  administrative  penalty  fees  (that  can  reach  EUR 
375,000  for  a  legal  entity)  in  cases  when  late  payment  regulations  are  not 
respected.  The  Parliament  can  alert  public  authorities  through  the  company’s 
auditor in case of repeated and significant late payment from companies that have 
certified  accounts,  as  well  as  from  their  clients.  Practices  that  tend  to  abusively 
delay  payment  period  starting  points,  such  as  hidden  periods  (délais  cachés)  are 
also sanctioned with a fee that can reach EUR 375,000 per legal entity. Finally, in 
2008,  an  inter-enterprise  mediation  was  established  in  France,  with  the  aim  of 
solving conflicts between companies while maintaining a good business relationship 
with the principal client. 

Bulgarian  legislation  has  given  creditors  the  right  to  receive  interest  14  days 
following the date of receipt of the invoice, in case no payment term is specified in 
the  contract.  Germany  goes  even  further  in  that  payment  is  immediately  due  on 
receipt  of  the  invoice  when  no  payment  term  has  been  specified  in  the  contract. 
While  this  is  established  by  the  German  Civil  Code,  section  270,  the  maximum 

28 

 
 
Evaluation of Late Payment Directive  

period  will  generally  be  60  days  according  to  the  provisions  resulting  from  the 
transposition of the Directive18.  

Finally, Spain has also introduced a maximum payment term in B2B transactions of 
60 days. In addition, in Spain it is compulsory to send the invoice a maximum of 30 
days following delivery19.  

Ireland, the United Kingdom and the Netherlands have made the decision not 
to  include  the  possibility  to  extend  payment  terms  to  60  days  for  public  entities 
providing healthcare. In addition, France has limited this possibility of extension to 
50  days  instead  of  60  days.  According  to  one  interviewee  in  Denmark,  public 
authorities  are  not  allowed  to  extend  the  payment  term  above  30  days,  however, 
some  types  of  institutions  on  the  basis  of  an  executive  order  can  ask  for  an 
exception  to  this  requirement.  The  interviewee  also  mentioned  that  this 
requirement  is  yet  to  be  enforced.  According  to  one  Spanish  industry  association, 
this  is  the  case  also  for  Spain  where  the  official  statutory  payment  period  for  the 
national health system is 30 days, whereas the Directive goes up to 60 days.  

6.5.1.2.  Interest rate for late payment 

A  number  of  Member  States  have  introduced  a  higher  interest  rate  than  that 
required by the Directive (i.e. the ECB/national central bank's reference rate plus 8 
percentage points). Table 1 shows an overview of these variations.  

Table 1. MS Interest rate for late payment 

Country 
Austria 
Bulgaria 
France 
Germany  
Hungary 
Romania 
Slovakia 

Interest rate 
ECB + 9 percentage points 
Bulgarian National Bank + 10 percentage points 
ECB + 10 percentage points 
ECB + 9 percentage points  
Hungarian National Bank + 10 percentage points 
Romanian National Bank + 9 percentage points 
Dual system in place for interest rates: a fixed one based on the ECB rate increased 
by  9  percentage  points,  a  variable  rate  based  on  the  ECB  rate  increased  by  8 
percentage points. 

6.5.2.  Additional national initiatives to combat late payment  

In addition to the provisions introduced by the Late Payment Directive at EU level, 
some  Member  States  have  put  in  place  other  measures,  both  voluntary  and 
structural, to deal with the issue of late payments.  

6.5.2.1.  Prompt payment codes  

Among  the  most  effective  measures  are  prompt  payment  policies  by  public 
authorities. In the field of PA2B transactions, the UK, Ireland and the Netherlands, 
have introduced policies to pay suppliers within 5, 15 and 30 days respectively. In 
Ireland the Government 15 Day Prompt Payment Requirement is a policy to reduce 
the payment period by public bodies to their suppliers from 30 to 15 days. In July 
to  Central 
2011, 

the  governmental  non-statutory  requirement  applicable 

18 More information available at: http://www.informita.com/resources/Informita+-+EU+ Directive+on+ 

Late+Payment+-+February+2014.pdf 

19 Art.4.2 Law 15/2010  

29 

 
 
 
 
 
 
 
 
 
 
                                                 
Ex-Post Evaluation of Late Payment Directive 

Government  Departments  was  extended  to  all  public  bodies.  Ireland  is  currently 
examining  the  possibility,  through  a  public  consultation,  of  incorporating  a 
government decision into national legislation, which obliges all public bodies to pay 
suppliers  within  15  days.  In  the  UK,  central  government  departments  have 
committed to the aim of paying 80% of undisputed invoices in five days, based on a 
policy  set  in  201020.  Data  from  April  2014-March  2015  regarding  payments  by  UK 
central government departments demonstrate that this objective has been reached. 
Over  this  period,  98.57%  of  invoices  were  paid  within  5  days.  Finally,  in  the 
Netherlands  data  on  payment  results  from  the  Dutch  central  government  offices 
show that in 2014 all governmental bodies paid 90% of invoices on time (within the 
30  day  limit).  The  main  issues  come  from  the  local  public  authorities,  which  have 
committed  to  improving  payment  delays21.  Indeed,  some  improvements  have 
already been made with local authorities making 84% of invoice payments on time 
in 2014 as compared to 77.5% in the two previous years.   

In  the  field  of  B2B,  the  UK  and  Ireland  have  again  followed  a  similar  route  by 
introducing  a  prompt  payment  code  (joint  public-industry  initiative)  which  is 
accompanied  by  a  prompt  payment  portal  (Ireland)  or  a  fair  payment  campaign 
(UK).  In  addition,  the  UK  Small  Business  Act  was  signed  into  law  in  March  2015, 
introducing  the  obligation  for  the  UK’s  largest  companies  to  report  on  payment 
practices twice a year22. In France, a Charter for Responsible Supplier Relations and 
a  Responsible  Supplier  Relations  Label  aims  to  distinguish  companies  that  have 
proven to work for sustainable and balanced business relations with suppliers. The 
label  is  promoted  by  the  French  government  and  is  awarded  to  companies  for  a 
period of three years.  

6.5.2.2.  Sector initiatives  

At  sector  level,  the  UK  and  Ireland  have  attempted  to  address  the  issue  of  late 
payment  in  construction  through  different  approaches.  In  the  UK,  a  Construction 
Supply Chain Payment Charter was set up, a public-industry initiative that gathers 
the key firm in the sector. The real impacts of the Charter are yet to be seen as the 
Charter  is  only  one  of  several  joint  industry  and  government  initiatives  between 
now  and  2025.  The  Construction  Act,  includes  a  scheme  for  Construction 
Contracts setting a payment period of 17 days in case no payment term has been 
agreed  in  the  contract.  The  Groceries  Supply  Code  of  Practice  and  the 
Groceries Code Adjudicator complement the transposition of the Directive in the 
food sector23. 

In  Ireland,  on  the  other  hand,  the  government  implemented  the  Construction 
Contracts  Act  to  introduce  statutory  requirements  regarding  payment  and  the 
provision for adjudication as a forum for the resolution of payment disputes (Table 
2).  

Table 2. Construction Act in Ireland 

Construction Contracts Act 2013 in Ireland  
The  Act  applies  to  certain  construction  contracts  with  a  value  in  excess  of  EUR  10,000  entered  into 
after such date as the Minister for Public Expenditure and Reform (the ‘Minister’) designates by way of 

20 UK Government, 5-days prompt payment, 2015, https://www.gov.uk/government/publications/5-day-

prompt-payment  

21 Minutes: 5th Meeting of the Late Payment Expert Group – Directive 2011/7/EU - 13 April 2015, 

Brussels 

22 Association of International Accountants (2015): Large Firms Must Publish Payment Practices available 

at: http://www.aiaworldwide.com/news/large-firms-must-publish-payment-practices 

23 UK Government, Groceries Code Adjudicator, https://www.gov.uk/government/policies/preventing-

and-reducing-anti-competitive-activities/supporting-pages/groceries-code-adjudicator 

30 

 
 
 
 
                                                 
Evaluation of Late Payment Directive  

statutory instrument.  
The  term  ‘construction  contract’  is  widely  defined  under  the  Act  and  includes  all  types  of  contracts 
traditionally considered to be construction contracts. In addition, it includes consultant appointments 
for  professionals,  such  as  architects,  and  contracts  covering  the  supply/manufacture  and  installation 
of materials, equipment or systems, such as, for example, fire protection or air-conditioning systems.  
Interim payments 
Under  the  new  Act,  all  construction  contracts  shall  include  adequate  arrangements  for  determining 
both  the  amounts  of,  and  periods  for,  interim  payments.  Whilst  most  standard  form  construction 
contracts allow for such arrangements, the Act provides for default arrangements where these are not 
set. In the case of sub-contracts, these default provisions will apply unless the sub-contract provides 
for  more  favourable  terms  for  the  sub-contractor.  ‘Pay  when  paid’  clauses  shall  be  prohibited, 
exceptional  circumstances  relating  to  the  insolvency  of  the  employer  or  contractor  further  up  the 
supply chain.  

Payment claims 
In  addition  to  the  above,  the  Act  also  sets  out  a  procedure  for  dealing  with  payment  claims. 
Where a payment claim notice is delivered and the amount is contested by the paying party, then it 
must respond within a 21-day period with certain minimum information. Any undisputed amount must 
be paid by the due date for payment. 
The Act gives contractors a statutory right to suspend work in the event of non-payment. A party who 
does not receive payment on the date that it falls due, will be allowed to suspend work, provided that 
party  has  delivered  a  written  notice  to  the  paying  party  at  least  7  days  before  the  proposed 
suspension is due to begin.  

Adjudication 
The 2013 Act provides a statutory entitlement to refer 'payment disputes' arising under a construction 
contract to adjudication. Each party has a right to adjudication but there is no mandatory requirement 
to use  it. Irish law allows  multiple disputes to be referred to adjudication under  related construction 
contracts. A party can seek adjudication at any time through issuing a notice of intention, whether at 
practical  completion  stage  or  whilst  works  are  ongoing.  The  parties  can  agree  on  an  adjudicator  or 
select  one  from  a  panel.  The  format  is  flexible  in  that  the  process  can  be  based  solely  on  written 
evidence. This will keeps costs down. The process is intended to ensure swift payment for works and 
so  naturally  operates  under  tight  deadlines;  an  adjudicator  must  reach  a  decision  within  28  days  of 
referral,  or  42  days  with  the  referring  party’s  consent.  The  Code  of  Practice  for  the  2013  Act  states 
that  the  adjudicator  must  give  written  reasons  for  their  decision.  The  adjudicator’s  award  is  binding 
on an interim basis and is enforceable until a court or arbitrator decides otherwise or the parties settle 
the dispute. Each party is responsible for their own costs and the costs of the adjudicator on a joint 
and several basis. However the adjudicator may direct that one party pays the costs and expenses of 
the adjudicator. 

In  France,  according  to  one  interviewed  authority,  in  some  cases  the  maximum 
payment terms in B2B transactions are more  restrictive than the Directive. This is 
the  case  e.g.  in  the  transport  sector  (30  days  from  the  invoice  date),  and 
perishable  food  (30  days  after  the  10  day  delivery).  In  road  transport  of  goods, 
failure  to  comply  with  a  30  day  payment  term  carries  a  fine  of  EUR  15,000  since 
2006.  

In Spain, a multi-sectorial platform against late payment was created in 200824. 
The  platform  was  created  by  inter-sector  and  sectorial  organisations  both  at 
national and regional levels to call on big enterprises, the government and political 
parties to adopt a common position on the issue of late payment. The platform has 
concluded  an  agreement  on  zero tolerance  against  late  payment  and  it  acts  as  an 
interest  group,  lobbies  the  Spanish  government  and  promotes  best  practices.  The 
platform  called  for  several  measures  to  be  introduced:  a  system  of  sanctions  for 
late  payers;  the  creation  of  a  Late  Payment  Control  Agency;  the  unification  of 
payment terms and periods for all enterprises; a strict 30-days payment policy for 
the  PA;  and  a  fast  and  cheap  extrajudicial  settlement  system.  In  early  2015,  the 

24 More information available at: http://www.pmcm.es/  

31 

 
 
 
 
 
 
 
 
 
 
 
                                                 
Ex-Post Evaluation of Late Payment Directive 

platform  presented  to  the  Spanish  Government  and  the  various  political  groups  a 
set  of  16  proposals  for  new  laws  and  regulations  to  minimise  the  risk  of  default, 
combat late payments and fight against corporate defaults25.  

6.5.2.3.  Other measures 

In  Sweden,  the  management  of  invoices  electronically  by  public  authorities  is 
another complementary measure. A regulation from 2008 introduced the obligation 
to  use  electronic  invoices  for  public  authorities,  and  in  2013  another  regulation 
introduced the same obligation for companies of more than 50 employees. Also the 
French  government  is  committed  to  improving  the  functioning  of  electronic 
invoices. By 2017, e-invoicing will become mandatory for bigger businesses, with a 
target  of  all  private  companies,  including  micro-enterprises,  using  this  system  by 
2020.  In  Italy,  as  of  March  2015,  electronic  invoicing  became  compulsory  for  all 
public authorities26. Also in Spain, the use of electronic invoicing in the public sector 
has been mandatory since 15 January 2015 following the adoption of Law 25/2013 
of 27 December 2013.  

A  system  of  administrative  penalties  in  case  of  late  payment  has  been 
introduced  in  France  through  legislation  2014-344  on  consumer  affairs.  Since  the 
legislation  only  entered  into  force  at  the  beginning  of  2015,  it  is  too  early  to 
measure  any  potential  impacts27.  Other  French  measures  include  the  voluntary 
Charter  for  Responsible  Supplier  Relations,  and  the  CHORUS  database  which  was 
opened in April 2014 – an online database with the aim of facilitating and speeding 
up some of public authority payments28.  

In  Italy,  VAT  payments  on  unpaid  invoices  were  addressed  by  the  government. 
Businesses  with  an  annual  turnover  of  EUR  200,000  or  less  have  the  option  of 
accounting  for  VAT  on  the  basis  of  cash  received  with  respect  to  business-to-
business  supplies.  Under  the  new  decree,  payment  of  VAT  can  be  deferred  until 
payment for the supply has been received. This should help companies handle the 
burden  of  taxation  in  situations  of  poor  cash  flow  as  a  result  of  late  payment. 
Similarly,  in  Spain,  as  of  January  2014  self-employed  business  owners  and  SMEs 
are  able  to  postpone  the  payment  of  VAT  until  the  relevant  invoice  has  been  duly 
paid. Interestingly, in its 31 October 2014 decision, Jetaircenter NV vs. the Belgian 
State, the Court of Cassation ruled that late payment interest cannot be claimed by 
the  Belgian  State  when  the  taxable  person  under  review  has  no  VAT  debit.  Under 
the  Belgian  VAT  legislation,  late  payment  interest  at  9.6%  is  legally  due  by  the 
taxable person when the VAT amount is not paid to the Belgian authorities on time. 
In other words, the late payment interest cannot be claimed when there is no VAT 
debit in the hands of the taxable person, i.e. no VAT payable to Belgian authorities.  

A  new  accrual  based  account  system  in  Malta  will  be  implemented  in  2017.  This 
new  system  will  ensure  that  average  creditor  days  are  properly  calculated  and 
ensure that no invoices are unregistered.  

France, Spain as well as Italy introduced measures aiming at monitoring payment 
duration.  In  France,  a  governmental  Observatory  for  payment  periods  examines 
once  a  year  the  situation  in  regards  to  B2B  late  payment,  whereas  in  Italy  the 

25 Manifiesto “Tolerancia  Cero contra  la Morosidad”,  February 2015, Plataforma Muctisectorial Contra la 

Morosidad 

26 More information available at: 

http://www.governo.it/GovernoInforma/Dossier/fattura_elettronica/2015-03-09CircolareMEF.pdf  

27 Information sheet on late payments, http://www.economie.gouv.fr/files/files/directions_services/ 
dgccrf/documentation/fiches_pratiques/2015/Delais_paiement.pdf, Legislation2014-344, 
http://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000028738036&categorieLien=id 
28 CHORUS database, https://chorus-portail-pro.finances.gouv.fr/chorus_portail_pro/, French Ministry of 
Justice, http://www.justice.gouv.fr/organisation-de-la-justice-10031/frais-de-justice-12698/des-
paiements-plus-rapides-pour-les-prestataires-du-ministere-26961.html 

32 

 
 
                                                 
Evaluation of Late Payment Directive  

Prompt payment indicator can be used by all government departments to calculate 
the  exact  time  they  are  taking  to  pay  trade  creditors.  In  Spain,  the  Spanish 
Federation  of  Small  and  Medium  Enterprises  (CEPYME),  together  with  the 
department  for  enterprise  and  SMEs  (DGPYME),  publishes  a  quarterly  bulletin  on 
late  payment  in  B2B  transactions  and  enterprises  financing,  which  collects  and 
analyses data on late payment. Monthly monitoring research is in place in Poland to 
monitor  the  debt  of  Polish  enterprises  and  the  level  of  obligations  paid  by  Polish 
companies.  

In Denmark, the Ministry of Finance has issued an administrative order concerning 
transparency  measures  for  late  payment  by  public  authorities,  which  has  recently 
come into force29.  

6.5.3.  Infringement procedures 

Since  the  transposition  deadline  of  the  Directive,  the  Commission  launched  13 
infringement actions:  

  Non-communication  infringement  cases  were  opened  against  4  Member 
States. These countries delayed communicating their transposition measures 
to  the  Commission.  The  deadline  was  16  March  2013  and  the  final 
notification  was  received  from  one  Member  State  in  July  2014.  All  of  these 
cases are now closed. 

  Non-conformity  (or  incorrect  transposition)  infringement  cases  were 
opened against 6 Member States. 2 cases remain open but will be closed by 
end of 2015. 

  Bad application infringement cases are open against 3 Member States:   

o  Greece:  The  Greek  government  has  established  a  practice  of 
enacting  laws  of  short  duration  which  provide  that  suppliers  of  the 
healthcare  sector  must  waive  their  rights  to  1)  claim  interest  on 
accumulated debt and 2) compensation for recovery costs in order to 
be  paid  by  public  bodies.  These  laws  are  in  contradiction  with  the 
Directive.  

o  Italy:  The  Italian  public  authorities  appear  not  to  be  respecting  the 
payment  deadlines  set  out  in  the  Directive.  This  is  confirmed  by 
different sources and is allegedly a widespread issue in Italy. 

o  Spain:  The  Spanish  public  authorities  appear  not  to  be  respecting 
the  payment  deadlines  set  out  in  the  Directive.  This is  confirmed  by 
different sources and is allegedly a widespread issue in Spain. 

29 Meeting with the Commission and national experts, 17 April, 2015 

33 

 
 
 
 
 
 
 
 
 
                                                 
Ex-Post Evaluation of Late Payment Directive 

7.  EFFECTIVENESS OF THE DIRECTIVE 

The  first  evaluation  dimension  to  be  addressed  relates  to  the  effectiveness  of  the 
Directive  i.e.  the  extent  to  which  it  has  achieved  (or  is  on  track  to  achieving)  its 
objectives. In this study, effectiveness is measured in terms of: 

a.  The awareness of businesses regarding late payment legislation  
b.  The extent to which businesses make use of the remedies conferred by the 

Directive 

c.  The extent to which the Directive has led to a reduction in payment periods 
d.  The extent to which the Directive has positively influenced liquidity/cash flow 

of the target group  

e.  The extent to which the Directive has facilitated cross-border trade  
f.  Unintended consequences of the Directive 

Box 4 - Key points of this chapter 

While  overall  awareness  of  the  Directive's  provisions  and  the  possibility 
to  claim  compensation  and/or  interest  is  relatively  high,  SMEs  and 
younger  firms  are  less  likely  to  be  aware  of  the  rules  regulating  late 
payment. 

Firms that are aware of the rules related to late payment are less likely 
to have experienced a deterioration in average payment delays. 

60%  of  survey  respondents  suggested  that  their  company  never 
exercises its right to claim compensation and/or interest in the event of 
late payment. 

SMEs  are  much  less  likely  to  exercise  their  rights  under  the  Directive 
than larger companies. 

For 39% of companies, the main reason for not exercising their rights is 
to maintain good commercial relationships. 

Lack  of  efficient  remedy  procedures  is  another  barrier  preventing 
companies from exercising their rights to compensation and interest 

Payment  duration  has  decreased  in  recent  years  in  both  PA2B  and  B2B 
transactions but very significant differences remain across countries. MS 
with above average payment duration in PA2B transactions also  tend to 
have above average payment durations in B2B transactions.  

While  it  is  difficult  to  attribute  these  changes  in  payment  behaviour 
directly  to  the  Directive,  there  is  little  evidence  that  the  Directive  has 
had an impact on payment behaviour and late payment practice. 

However,  regarding  payment  terms,  more  than  two  thirds  (70%)  of 
companies  indicate  that  they  apply  payment  terms  of  30  days  or  less, 
while 90% apply terms of 60 days or less as required in the Directive. 

Country and sector effects are more important drivers of payment terms 
than any other company characteristics or awareness of the rules around 
late payment. 

Rather  than  legislation,  national  business  culture,  economic  conditions 
and power imbalances are the driving factors for payment behaviour.  

In PA2B transactions, prompt payment policies are seen to have made a 
significant  contribution  towards  the  reduction  of  overall  payment 
duration. 

To  date,  there  is  little  evidence  that  the  Directive  has  already  achieved 

34 

 
 
 
Evaluation of Late Payment Directive  

its  wider  objectives  regarding  liquidity  improvements  or  facilitation  of 
cross-border trade.  

7.1.  Awareness of the Directive 

First, overall awareness of the Directive's provisions and the possibility to 
claim  compensation  and/or  interest  is  relatively  high.  Almost  two  thirds  of 
companies are aware of the (general) rules regulating late payments. At the same 
time,  86%  of  companies  know  about  their  right  to  claim  compensation  and/or 
interest30.  

Second,  delving  into  the  causes  of  awareness,  the  regression  analysis  shows  that 
the  size  and  age  of  the  company  are  statistically  significant.  SMEs  and  younger 
firms  (less  than  10  years  old)  are  less  likely  to  be  aware  of  the  rules 
regulating  late  payment.  This  relationship  holds  even  after  country  and  sector 
variables have been taken into account.  

The figure below shows  awareness of the rules regulating late payment by sector. 
Firms in education, administration, agriculture, forestry and fishing are least aware 
of their rights under the Directive. The health (56%), food (61%) and construction 
(61%)  sectors  are  in  the  middle  of  the  table  and  close  to  the  overall  average. 
Perhaps  unsurprisingly  companies  that  are  closest  to  the  public  sector  (utilities, 
public administration) are most aware of late payment rules.  

30  The  fact  that  there  more  companies  are  aware  of  the  specific  right  to  claim  compensation  and/or 
interest than are aware of the (general) rules regulating late payment shows that some companies 
are  knowledgeable  of  their  rights  even  though  they  might  not  link  this  to  any  regulatory 
intervention. 

35 

 
 
 
 
 
 
 
 
                                                 
Ex-Post Evaluation of Late Payment Directive 

Figure 4. Likelihood (odds-ratio) of awareness of the rules regulating late 
payment by sector 

Source: Company survey  

Interviews  in  three  sectors  (construction,  public  health  and  food)  confirm  that 
awareness  of  the  rules  regulating  late  payment  varies  across  companies. 
The SME association in Ireland notes that a company is likely to be more aware of 
its  rights  if  it  takes  part  in  an  organised  business  forum  (e.g.  association,  sector 
chamber)  where  issues  such  as  late  payment  are  discussed.  Furthermore,  about 
half of business representatives (inter alia Cyprus, Denmark, Greece, Malta, France, 
Poland,  Italy,  Ireland,  Portugal,  Croatia,  Spain,  and  the  UK)  noted  that  even  if 
companies are aware of their rights, they fear the consequences of exercising these 
rights.  

Although general awareness of rules regulating late payment and specific rights to 
claim compensation and/or interest are relatively high, this on its own does not of 
course  prevent  companies  from  experiencing  late  payments.  Indeed,  80%  of 
companies which experienced a late payment in the last three years were 
aware of the possibility to claim compensation and/or interest.  

However,  the  regression  analysis  shows  that  firms  that  are  aware  of  the  rules 
related to late payment are less likely to have experienced a deterioration 
of  average  payment  delays  (odds  ratio  of  0.78)  over  the  last  three  years  than 
companies that are not aware of the rules. This is an important result which clearly 
demonstrates  the  impact  of  both  the  existence  of  late  payment  rules  and  the 
importance of being aware of these rules. 

7.2.  Compensation and interest  

The first key finding of desk research, survey and interviews is that  usage of the 
provisions  introduced  in  the  Directive  is  not  widespread.  Indeed,  60%  of 
survey  respondents  indicated  that their company never exercises  its  right  to  claim 

36 

 
 
 
 
Evaluation of Late Payment Directive  

compensation and/or interest in the event of late payment. This result is in line with 
desk research which suggests for example, that only 16% of companies in Portugal 
and only 3.5% of Irish SMEs claim interest in cases of late payment31.  

At  the  same  time,  there  is  a  difference  between  countries  with  higher  and  lower 
average  payment  duration.  In  countries  with  a  shorter  average  payment 
duration,  companies  are  more  likely  to  always  exercise  their  right  (11% 
against  3%)  with  another  41%  which  do  it  sometimes  (against  31%  in  the  other 
group). Thus, the Directive seems to be a more relevant instrument, in this sense, 
for companies in countries where the problem of late payment is less severe. At the 
same  time,  the  Directive may  actually  exacerbate  cross-country  differences  in  late 
payments  because  the  rights  that  it  confers  are  used  more  in  countries  where  the 
problem of late payments is less severe.  

The figure below shows the share of companies that exercise their rights under the 
Directive.  Companies  in  France  are  least  likely  to  ever  exercise  their  rights  while 
companies  in  Lithuania  and  Luxembourg  (followed  by  Sweden  and  Germany)  are 
most likely to always exercise their rights.  

Figure  5.  Share  of  companies  that  exercise  their  right  to  claim 
compensation and/or interest in the event of late payment 

Source: Company survey  

31 ISME Press Release SME Credit Watch, Q1 2015.                                                          

37 

 
 
 
 
 
 
 
 
 
                                                 
Ex-Post Evaluation of Late Payment Directive 

Second, the regression analysis delves a bit deeper to understand the causes of this 
failure by companies to exercise their rights. The results show that SMEs are much 
less  likely  to  exercise  their  rights  under  the  Directive  than  larger 
companies. Indeed, the odds of SMEs exercising their right to claim compensation 
and/or  interest  in  the  event  of  late  payment  are  about  half  those  of  larger 
companies (odds ratio of 0.51). This relationship holds, even when all other factors 
are  taken  into  account  (sector,  country,  company  age,  main  clients  and  share  of 
turnover  that  is  domestic).  The  strong  association  between  size  and  usage  of  the 
Directive’s  provisions  is  also  confirmed  in  interviews  with  industry  stakeholders. 
Associations in Belgium, Ireland, Italy, Portugal, Romania and Spain confirmed that 
the  factors  that  prevent  companies  from  exercising  their  rights  are  more 
accentuated among smaller companies than among larger business.  

Company  age,  main  type  of  client,  share  of  domestic  turnover  or  sector32  are  not 
significant  predictors  of  how  likely  a  company  is  to  exercise  its  rights  under  the 
Directive. There is a small effect for companies with only public authorities as main 
clients who are more prone to use the provisions available to them than companies 
whose clients include other businesses. However, this relationship disappears when 
the company’s sector is taken into account.  

Furthermore,  the  survey  results  show  that  for  39%  of  respondents,  the  main 
reason  for  not  exercising  their  rights  is  to  maintain  good  commercial 
relationships.  Interviews  and  desk  research  confirm  that  claiming  compensation 
or  interest  is  not  a  simple  case  of  exercising  one’s  rights  but  it  often  involves  a 
complex  calculation  of  multiple  clashing  interests.  By  far,  the  most  cited  reason 
(industry  associations  in  inter  alia  Cyprus,  Greece,  Croatia,  Spain,  Ireland,  Italy, 
France, Denmark, Portugal, Poland, Malta and the UK) for not exercising their rights 
is  the  fear  of  damaging  existing  business  relationships.  Indeed,  companies  fear 
losing  clients  after  requesting  rightful  contract  terms,  claiming  interest  on  late 
payment, or compensation for recovery costs.  

Figure 6. Reasons for not claiming interest and compensation in the event 
of a late payment 

Source: Company survey 

Business representatives also suggested that the powerful position of the public 
sector  as  a  contracting  entity  as  well  as  a  fear  of  relationship  damage  with  the 
contracting  authority  means  companies  often  do  not  ask  for  interest  on  late 
payment. As a result of this, for example in Denmark, one association suggests that 
small companies that have experienced this problem should contact them, and the 
association  might  in  turn  be  able  to  deal  with  a  court  case  on  behalf  of  several 

32  With  the  exception  of  “agriculture,  forestry  and  fishing”  (less  likely)  and  “electricity,  gas,  steam  and 

air conditioning supply” (more likely)  

38 

 
 
 
 
 
                                                 
Evaluation of Late Payment Directive  

smaller  companies  at  once  to  avoid  them  risking  their  business  relationships.33 
Industry stakeholders maintained  that the fear of damaging business relationships 
is  bigger  when  dealing  with  strategic  partners.  Some  industry  stakeholders  (inter 
alia  in  the  UK,  Portugal  and  Italy  as  well  as  UEAPME,  the  SME  association  at  EU 
level)  argued  that  this  situation  could  be  remedied  with  mechanisms  that 
automatically  impose  interest  on  late  payment.  This  would  mitigate  the  negative 
effects on business relationships in case interest is claimed by creditors.  

Finally,  lack  of  efficient  remedy  procedures  is  another  barrier  preventing 
companies from exercising their rights to compensation and interest. Even 
if  they  do  decide  to  exercise  their  rights  under  the  Directive,  and  despite  the 
expedited  recovery  procedures  under  Article  10  of  the  Directive,  companies 
consider  that  debt  recovery  currently  takes  too  long.  Using  the  national  court 
system  tends  to  be  long  and  inefficient.  The  time  required  for  and  cost  of  court 
procedures discourages companies from taking a late payer to court, in particular in 
cases  of  smaller  sums  where  the  companies  risk  spending  more  money  than  they 
would  actually  have  recovered.  Consequently,  creditors  prefer  to  write  off  unpaid 
bills rather than go to court and sue for a bad debt. Indeed, according to the results 
gathered  through  the  online  survey,  half  the  companies  (51%)  never  engaged  in 
litigation or used alternative dispute resolution to recover unpaid invoices.  

Figure  7.  Use  of  litigation  or  alternative  dispute  resolution  to  recover 
unpaid invoices 

Source: Company survey 

7.3.  Average payment duration in PA2B and B2B transactions  

The figure below shows differences in average payment duration across MS for both 
PA2B  and  B2B  transactions  in  2015.  Italy,  Spain  and  Portugal  have  the  longest 
overall payment duration, while the Baltic countries and Germany are at the other 
end of the spectrum.34 

33 Building Supply, June 2013, http://www.building-supply.dk/article/view/105291/lov_ om_betaling sfr 

ister_uden_effekt?ref= newsletter#.VTPckiFViko  

34 It should be noted that the 2015 figure for Greece is a significant improvement over previous years. 
However,  this  should  be  seen  within  the  context  of  the  economic  crisis,  which  has  hit  Greece 
particularly  hard  and  where,  as  a  result,  the  use  of  trade  credit  has  decreased  significantly  with  a 
number of suppliers requiring upfront payment for goods and services.  

39 

 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Ex-Post Evaluation of Late Payment Directive 

Figure 8. Average 2015 payment duration in B2B and PA2B transactions by 
country 

Source: Intrum Justitita, (EPI 2015) 

The  below  shows  changes 
the 
implementation  of  the Directive.  Average  payment  duration  has  decreased  in  both 
B2B  and  PA2B  transactions,  but  it  remains  higher  than  the  limits  set  by  the 
Directive.   

in  EU  average  payment  duration  since 

Figure 9. Average payment duration in the EU 2010-2014 

Source: Intrum Justitia, EPI (2014) 

A  detailed  country  analysis  shows  that  Italy  (165  days  on  average),  Greece  (155 
days), Spain (154 days) and Portugal (129 days) are the slowest payers, while only 
Finland  and  Estonia  out  of  all  EU  Member  States  comply  with  the  30  day  limit 
introduced for PA2B transactions by the new Directive (on average). 

40 

 
 
 
 
 
Evaluation of Late Payment Directive  

The  figure  below  shows  the  average  payment  duration  in  EU  Member  States 
and  for  the  EU  as  a  whole  for  both  B2B  and  PA2B  transactions.  There  is  a 
positive association between B2B and PA2B payment durations. Countries that have 
a  low  average  payment  duration  in  B2B  transactions  also  tend  to  have  relatively 
low payment durations in PA2B transactions.  

Nevertheless, and despite the only marginal decrease in average payment duration 
in  some  Member  States35,  it  is  clear  that  some  countries  have  payment 
durations  that  are  much  higher  than  the  EU  average  (IT,  ES,  EL,  PT,  CY). 
Furthermore,  in  these  countries  it  is  PA2B  payment  durations  which  remain 
particularly high. Some of the Nordic countries on the other hand, have relatively 
low payment durations in PA2B transactions, in particular SE and FI. 

Figure 10. Average B2B and PA2B payment duration in EU MS (2014) 

Source: Intrum Justitia, EPI (2014) 

7.4.  Payment  duration,  payment  delays  and  payment  terms  in 

B2B transactions 

As  mentioned  in  chapter  5,  it  is  very  difficult  to  directly  attribute  changes  in 
payment terms, duration or delay to the Directive. There are indeed a large number 
of  intervening  factors,  such  as  the  impact  of  the  financial  crisis,  which  make  it 
impossible to quantify the impact of the Directive on payment behaviour.   

Nevertheless,  it  is  clear  that  the  Directive  has  streamlined  payment  terms  across 
the  EU  and  as  such  it  should  have  contributed  to  a  reduction  in  overall  payment 

35 All MSs except BG, RO, SI 

41 

 
 
 
 
 
 
 
 
 
                                                 
Ex-Post Evaluation of Late Payment Directive 

duration.  In  addition,  as  a  pan-European  intervention,  the  Directive  should  have 
contributed  to  reducing  cross-country  and  cross-sectoral  differences  in  payment 
behaviour.   

At  the  same  time,  given  the  wide  variety  of  drivers  of  late  payment,  this  study 
demonstrates that a legislative instrument  cannot – on its own – change payment 
behaviour.  Indeed,  stakeholders  in  inter  alia  Austria,  Bulgaria,  Denmark,  Finland, 
Sweden, Slovakia, Spain, Romania, and the UK argued that the Directive has, to 
date,  had  only  minor  effects  on  payment  behaviour  and  late  payment 
practice  in  their  Member  State.    For  example,  in  the  Nordic  countries  business 
representatives and public authorities agreed that historically there has been a very 
strict culture to abide by contractual obligations which influences the propensity to 
pay promptly. In Austria, one sector association argued that it is too early to judge 
if 
In  Romania,  business 
representatives  suggested  that  the  Directive  only  impacted  the  length  of  payment 
in  PA2B  transactions  but  no  change  in  payment  practice  was  observed  in  B2B 
transactions. 

late  payment  practice. 

the  Directive  changed 

7.4.1.  Payment duration in B2B transactions 

The table below shows that the average payment duration in B2B transactions 
in  the  European  Union  has  indeed  decreased  from  56  days  in  2011  to  47 
days in 2014.  

Table 3. Average payment duration 2010-2014 

Average payment duration (EPI) 

B2B 
Source: Intrum Justitia, EPI (2011-2014) 

56 

52 

49 

2011 

2012 

2013 

2014 

47 

While  this  reduction  in  the  overall  average  payment  duration  is  certainly  worth 
celebrating,  the  situation  becomes  more  muddled  once  these  headline  figures  are 
disaggregated.  Since  2010,  average  payment  duration  has  decreased  in only 
about half of the MS while it remained stable in the other countries (see Table 4). 
In fact, for the subset of countries where a longer data series exists, comparing the 
current situation with the 1990s is quite a sobering exercise. While there has been 
a reduction in payment duration in 7 of the 14 countries where data are available, 
payment  duration  has  actually  increased  in  6  countries  in  the  last  20  years. 
Furthermore,  differences  between  countries  have  accentuated  with  some  of  the 
best performers (e.g. Finland) in the 1990s managing to deliver further reductions 
in  payment  duration,  while  the  situation  has  deteriorated  in  some  of  the  worst 
performers (e.g. Italy).  

Table 4. Average length of payment duration (2010/2014) 

Country/ 
Year 
Austria 
Belgium 
Denmark 
Finland 
France 
Germany 
Greece 
Ireland 
Italy 
Netherlands 
Portugal 
Spain 
Sweden 
UK 

EPI Data 2010-2014 (Intrum Justitia) 
2011 

2012 

2013 

38 
50 
38 
27 
59 
37 
110 
65 
103 
43 
92 
99 
35 
46 

36 
54 
37 
27 
57 
35 
80 
66 
96 
43 
90 
97 
35 
44 

35 
48 
35 
26 
55 
34 
78 
60 
96 
42 
85 
85 
35 
41 

2014  

Avg 

34 
49 
34 
26 
54 
34 
76 
59 
94 
41 
83 
83 
35 
42 

36 
50 
36 
26.5 
56 
35 
86 
62.5 
97 
42 
87.5 
91 
35 
43 

42 

 
 
 
 
 
 
Evaluation of Late Payment Directive  

EU-14 
60.1 
Source: Intrum Justitia, EPI (2010-2014) 

56.9 

53.9 

53.1 

56.0 

7.4.2.  Payment delays in B2B transactions 

As  mentioned  in  Section  6,  four  out  of  five  companies  (78%)  have  experienced 
payment delays in the last three years. At the same time, pan-EU data from the EPI 
indicates  that  there  has  been  a  slight  decrease  in  payment  delays  in  B2B 
transactions from 20.5 days in 2011 to 19.3 days in 2014 (-1.2 days).  

Table 5. Average payment delay 2010-2014 

Average payment delay (EPI) 

2011 

2012 

2013 

B2B 
Source: Intrum Justitia, EPI (2011-2014) 

20.5 

20.6 

19.6 

2014 

19.3 

The perception that payment delays have only slightly improved or remained 
static is shared by the survey respondents where the situation has improved only 
for  almost  one  in  five  companies  and  it  has  been  stable  for  almost  half  of  the 
respondents.  One  third  of  companies  think  that  there  has  been  a  deterioration  in 
average payment delays. 

Figure  11.  Perceived  change  in  average  payment  delays  in  the  last  three 
years (with other businesses) 

Source: Company survey 

The  above  figure  masks  significant  differences  in  terms  of  the  evolution  of 
delays  across  countries.  As  the  regression  analysis  finds,  firms  in  Greece  are 
more likely to have seen delays either deteriorate or improve over the last 3 years 
rather  than  experiencing  no  change.  This  suggests  that  the  business  environment 
for  firms  in  the  country  has  been  rather  unstable  but  also  that  it  has  not  been 
equally negative for all companies. In Hungary, in contrast, firms are less likely to 
have  experienced  either  improvement  or  deterioration  than  in  other  countries. 
Hungary seems to have a more stable business environment than other countries in 
terms of payment behaviour.  

As for payment duration, the situation regarding delays remains very mixed across 
the EU with some Member States experiencing a decrease in payment delays while 
other Member States have seen an increase during the same period.  

Overall  there  is no  clear  trend with the majority  of Member States  having 
seen  little  or  no  change  in  payment  delays.  However,  a  decrease  in  payment 

43 

 
 
 
 
 
 
 
 
 
 
 
Ex-Post Evaluation of Late Payment Directive 

delays  is  noted  in  some  Member  States  -  Italy,  Hungary,  Cyprus,  Spain  and 
Portugal - though these improvements need to be set against the relatively higher 
delays in these countries compared with the Nordic countries where improvements 
have been more modest. The only country with a large increase in delays is Greece 
(11 days). It should be noted that lack of a clear improvement in payment delays 
may be due to the fact that Directive has come into force only relatively recently. In 
the  case  of  Denmark  (one  of  the  countries  with  a  small  decrease  in  payment 
delays), this is strengthened by a survey36 with SMEs which showed that 59.6% of 
respondents  in  January  2015  felt  that  the  situation  regarding  late  payment  was 
unchanged  since  the  national  legislation  implementing  the  Directive  came  into 
force. 

Table 6. Changes to payment delays in B2B transactions (2011-2014, in 
days) 
Large decrease  
Italy (-5) 
Hungary (-6) 
Cyprus (-6) 
Spain (-6) 
Portugal (-8) 

No major change  Small increase  
Netherlands (-2) 
Estonia (-1) 
Finland (-1) 
Ireland (-1) 
Czech Republic (0) 
Sweden (0) 

Small decrease 
Germany (-3) 
Slovakia (-3) 
Denmark (-4) 
France (-4) 
Lithuania (-4) 

Croatia37 (+4) 
Belgium (+4) 

Large increase 
Greece (+11) 

Kingdom 

United 
(+1) 
Bulgaria38 (+1) 

Austria (+1) 

Poland (+2) 

Latvia (+2) 

Romania39 (+2) 

Source: Based on Intrum Justitia, EPI (2011-2014). 

Looking at the drivers of change in payment delays, the regression analysis shows 
that once country and sector effects have been taken into account, companies that 
are  aware  of  the  rules  regulating  late  payment  are  less  likely  to  have  seen  a 
worsening  of  payment  delays  over  the  last  three  years  (odds-ratio  of  0.78).  This 
suggests  that,  while  such  rules  do  not  eliminate  late  payments,  they  can  prevent 
the situation from deteriorating.  

This  result  is  shared  by  industry  interviewees  who  indicated  that  greater 
awareness is likely  to  have triggered better payment  practices. The impact 
of the economic crisis may have forced businesses to take a more active approach 
to  handling  late  payment.  For  instance,  one Romanian  industry  interviewee  stated 
that  after  a  two-week  delay,  companies  usually  send  out  payment  reminders 
threatening  to  take  the  debtor  to  court.  This  is  also  supported  by  companies  that 
are more persistent in contacting debtors before further action is taken, if any.  

7.4.3.  Payment terms in B2B transactions 

Finally,  since  the  Directive  came  into  force  payment  terms  applied  by  companies 
have changed.  This is because the Directive does in fact set a maximum payment 
term for both  B2B  (unless  expressly  agreed  otherwise  and  not  grossly  unfair)  and 
PA2B transactions. Out of all companies that participated in the survey, more than 
two  thirds  (70%)  apply  payment  terms  of  30  days  or  less,  while  90% 
apply terms of 60 days or less as required in the Directive.  

36 Danish Association of SMEs (not publicly available).  
37 Data available for 2013-2014 
38 Data available for 2012-2014 
39 Data available for 2012-2014 

44 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Evaluation of Late Payment Directive  

Figure 12. Average payment terms (in days) applied in B2B transactions 

Source: Company survey  

The  regression  analysis  allows  a  more  detailed  analysis  of  the  drivers  of  these 
payment  terms.  The  model  shows  that  company  size,  age  or  share  of  turnover  in 
the domestic market do not explain the payment terms applied in B2B transactions. 
At  the  same  time,  awareness  of  the  rules  regulating  late  payment  does  not  have 
any  significant  impact  on  the  payment  terms  that  companies  actually  apply,  once 
all other variables are taken into account.  

Instead, country and sector effects are more important drivers of payment 
terms than other company characteristics or awareness of the rules around 
late  payment.  In  terms  of  sector  impacts,  companies  in  manufacturing  and 
construction  have  payment  terms  that  are  on  average  more  than  10  days  longer 
than  companies  in  other  sectors.  Conversely,  companies  in  “human  health  and 
social  work”  and  in  education  have  significantly  lower  payment  terms  in  B2B 
transactions. Similarly, when all other factors are taken into account, companies in 
Greece apply payment terms that are more than 60 days longer than the reference 
group  (Austria).  Companies  in  Italy,  Portugal,  Cyprus,  and  Spain  experience 
payment terms between 30 and over 50 days longer than Austrian companies with 
otherwise equivalent characteristics.  

What  explains  these  stark  country  differences?  First  of  all,  consultation  with 
industry across all MS confirms that companies do agree longer payment terms 
during tougher times i.e. the recent financial crisis. Industry representatives (i.e. 
a general representative of business in Sweden and Ireland, construction in the UK, 
public health in Croatia) argued that in the current economic environment creditors 
very often do not have a choice other than agreeing to longer terms. Firms across 
the supply chain are exposed to liquidity constraints and obtaining free credit from 
suppliers  is  the  easiest  remedy  to  problems  with  cash  flow.  Secondly,  power 
imbalances  may  partially  explain  why  the  average  payment  duration  is  higher 
than  30  days.  Firms  accept  longer  payment  terms,  especially  in  contracts  with 
stronger partners who often dictate the terms. More powerful actors impose longer 
payment  periods  on  smaller  suppliers  with  the  latter  accepting  those  in  a  fear  of 
damaging  or  losing  a  business  partner.  Redress  solutions  are  not  always  useful 
because  they  would  mean  that  creditors  would  have  to  confront  their  debtors, 
effectively  ending  business  relationships.  Finally,  stakeholders  (inter  alia 
construction  representative  in  Spain)  argued  that  late  payment  became  the 

45 

 
 
 
 
 
 
 
 
Ex-Post Evaluation of Late Payment Directive 

norm in some of the Southern states. Over the years, companies treated delays as 
a part of day-to-day business not willing to challenge the status quo.  

All  these  factors  fall  outside  the  scope  of  a  legislative  measure,  whether 
European  or  national.  As  a  result,  while  industry  stakeholders  are  supportive  of 
the aims of the Directive and they credit it with bringing the problem high onto the 
political agenda, many are sceptical about the possibility for a legislative instrument 
alone to succeed in combating late payments.  

Box 5. Case study: food sector 

Interviews  with  industry  stakeholders  showed  that  late  payment  constitutes  a  problem  in  the  food 
sector. Stakeholders also pointed out that  in addition  to  payment delays, companies  in the food sector 
suffer from prolonged payment terms. For example, the UK food sector exhibits a significant diversity 
in  payment  terms40.  In  Ireland,  according  to  the  Food  and  Drink  Industry  Ireland  (FDII),  access  to 
credit and late payment are amongst the major challenges the Irish food sector is currently facing41. The 
imbalance of power between suppliers and retailers in particular results in late payment which places a 
heavy cost on food and drink businesses. SMEs are particularly hit by this problem as the ensuing credit 
restrictions limit the financial capability of companies42. 

Stakeholders argued that the Directive has only been in force for a relatively short time, which made it 
difficult to judge its effectiveness, especially given the scale of economic challenges faced in parts of the 
EU.  This  was  made  even  more  challenging  with  certain  Member  States  such  as  the  UK,  introducing 
additional legislation to enforce optional elements of the Directive.  

There is no pan-European data on the EU food sector to demonstrate the extent of the problem across 
MS but some national sources point to the impact of late payment.  

 

 

 

 

For  example,  a  Hungarian  study  on  supplier  relationships  in  regards  to  private  labels,  found 
that 20-25% of buyers in the food retail sector frequently or always paid late43. A survey carried 
out in 2014 found that two-thirds of food processing firms stated they were paid late44.  
The Food and Drink Industry Ireland (FDII) estimated that access to credit and late payment 
are  amongst  the  major  challenges  the  sector  is  currently  facing45.  The  imbalance  of  power 
between suppliers and retailers in particular results in late payment which places a heavy cost 
on  food  and  drink  businesses.  SME’s  are  particularly  hit  by  this  problem  as  the  ensuing  credit 
restrictions limit the financial capability of companies46.  
National sources also showed in 2014 a 92% increase in the number of companies in the UK’s 
food and beverage manufacturing industry experiencing ‘significant financial distress’47. One of 
the  key  reasons  for  the  financial  distress  of  SMEs  in  the  food  supply  chain  related  to  the 
elongated payment terms put in place by major UK retailers. In fact, as the payment period is 
not  an  isolated  commercial  condition,  but  forms  part  of  a  larger  set  of  commercial  terms, 
stakeholder  organisations  across  the  food  supply  chain  have  developed  a  joint  voluntary 
initiative called the Supply Chain  Initiative (SCI), whose purpose it is to promote fair business 
practices in the food supply chain as a basis for commercial dealings. Operators who register in 
the  SCI  commit  to  applying  the  Principles  of  Good  Practice,  among  which  the  respect  of  the 
agreed terms48.  
Finally,  stakeholders  argued  that  longer  payment  terms  in  the  sector  are  linked  to  the 
seasonality  of  produce  and  buying  windows  of  3-4  months.  For  this  reason,  several  Member 
States,  such  as  Italy  and  France  have  introduced  sector-specific  legislation  on  payment 
practices  in  the  grocery  sector.  Ireland  is  currently  reviewing  its  draft  legislation  aiming  to 
regulate fair trading in the supply chain.  

This  correspondents  with  our  findings  where  market  power  imbalances  play  an  important  role  in 

40 Food Manufacture (2015): Late payments hinder food jobs, available at: 

http://www.foodmanufacture.co.uk/Business-News/Food-jobs-hindered-by-late-payments 

41 Irish Ministry of Agriculture (2012), Annual Report 2012  
42 Food & Drink Industry Ireland - Competitiveness Indicators 2010  
43 European Commission (2011): The Impact of Private Labels on the Competitiveness of the European 

Food Supply Chain, available at: http://ec.europa.eu/enterprise/sectors/food/files/study_ 
privlab04042011_ en.pdf   

44 More information available at : http://auditandrisk.org.uk/news/supply-chain-problems-and-late-paym 

ent-hit-food-processing-sector   

45 Irish Ministry of Agriculture (2012), Annual Report 2012  
46 Food & Drink Industry Ireland - Competitiveness Indicators 2010, available at: 

http://www.fdii.ie/Sectors/FDII/FDII.nsf/vPages/News_and_Events~Press_release_archive~food-
sector-launches-competitiveness-indicators-report-2010/$file/FDII%20Competitiveness%20 
Indicators%20Report%202010.pdf 

47 More information available at: http://www.begbies-traynorgroup.com/news/business-health-statistics/ 

supermarket-price-war-could-force-food-suppliers-to-go-bust 
48 More information available at : http://www.supplychaininitiative.eu/ 

46 

 
 
                                                 
Evaluation of Late Payment Directive  

combating late payment. 

7.5.  Payment  duration  and  payment  delays 

in  PA2B 

transactions 

As  section  6  has  shown,  payment  duration  and  delays  in  PA2B  and  B2B  countries 
are  highly  correlated.  Countries  where  late  payments  is  a  problem  in  the  private 
sector also exhibit similar problems in the public sector.  

7.5.1.  Payment duration in PA2B transactions  

To  date,  the  Directive  has  had  limited  effect  on  the  average  payment 
duration  in  PA2B  transactions.49  While  the  average  payment  duration  has 
decreased from 65 days in 2011 to 58 days in 2014, it stays well beyond the terms 
set out by the Directive.  

Table 7. Average payment duration in PA2B transaction 2010-2014 

Average payment duration (EPI) 

2011 

2012 

2013 

PA2B 
Source: Intrum Justitia, EPI (2011-2014) 

65 

65 

61 

2014 

58 

In  some  countries  such  as  Greece,  Italy  and  Spain  the  average  payment 
duration  greatly  exceeds  the  European  average.  For  example,  payment 
duration  in  Italy  and  Spain  for  PA2B  transactions  remains  at  the  level  of  165  and 
154 days respectively. 

At the same time, while the average payment duration in Southern countries 
stays well above the EU average, these countries have also benefited from 
the  greatest  reduction  in  recent  years.  For  example,  in  Italy  payment  duration 
was  reduced  by  15  days  (from  180  days  to  165  days)  in  the  2011-2014  period. 
However,  ten  countries  have  seen  an  increase  of  between  1  and  9  days  and  four 
countries  have  not  experienced  any  change  in  payment  duration  in  PA2B 
transactions.  

Table 8. Changes in payment duration PA2B transactions (2011 to 2014, in 
days) 

Large decrease  

Italy (-15) 
Greece (-13) 
Portugal (-10) 
Austria (-9) 
United Kingdom (-7) 
France (-5) 
Ireland (-5) 

Stable 

Small 
decrease 
Lithuania (-4)  Hungary (-2) 
Denmark (-2) 
Belgium (-4) 
The Netherlands (-1) 
Finland (0) 
Germany (0) 
Poland (0) 
Sweden (0) 

Small increase   Large 

n/a 

increase 
Slovenia50 (+9) 
Bulgaria (+5)51 
Latvia (+5) 

49  It  needs  to  be  reiterated  that  it  is  very  difficult  to  directly  attribute  changes  in  payment  terms, 
duration or delay to the Directive due to the large number of intervening factors, such as the impact of 
financial crisis, which make it impossible to quantify the impact of the Directive on payment behaviour.   

50 Ibid.  
51 Data available for 2012-2014 

47 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Ex-Post Evaluation of Late Payment Directive 

Large decrease  

Small 
decrease 

Stable 

Small increase   Large 

increase 

Spain (+1) 
Romania52 (+1) 
Slovakia (+1) 
Cyprus (+1) 
Croatia (+2)53  
Czech republic (+1) 
Estonia (+1) 

Source: Based on Intrum Justitia, EPI (2011-2014) 

In  trying  to  explain  the  above  picture,  further  analysis  shows  that  prompt 
payment policies made a significant contribution towards the reduction of 
the  overall  payment  duration.  Additionally,  the  industry  argued  that  the  key 
reason  for  public  authorities  paying  more  promptly  was  the  awareness  that  they 
need  to  set  a  good  example  to  help  enforce  the  provisions  of  the  Directive.  For 
instance, in Spain, although the average payment duration for public authorities is 
above  the  limits  set  out  in  the  Directive,  it  has  decreased  in  recent  years.  In  this 
vein, the interviewed stakeholders argued that the Directive was effective, as it has 
obliged  the  government  to  act.  In  Spain,  a  recent  law54  forces  the  government  to 
pay  in  place  of  regions  should  they  fail  to  do  so  within  6  months.  Another  law  on 
transparency and good governance has also been implemented to provide penalties 
for  officials  who  accept  commercial  transactions  without  budget  support. 
Furthermore, in the Netherlands, Ireland and the UK, industry stakeholders stated 
that public  authority payment  has improved with the introduction of the Directive. 
This  is  supported  by  the  national  data  which  indicates  that  central  government 
offices  pay  90%  of  invoices  on  time.  In  these  countries,  prompt  payment  policies 
helped reinforce the positive effect of the Directive (see also Section 6.5.2.1).  

Box 6. Case study: construction sector 

Payment  delays  in  the  construction  sectors  have  remained  largely  stable  in  B2B  transactions  and  have 
increased in PA2B transactions. However, the causes of late payment in the construction sector can be 
attributed to the specifics of the sector.  

Average payment delay in the construction sector (in days) 

40

30

20

10

0

2010

2011

2012

2013

2014

B2B

PA2B

Source: Adapted from European Payment Index White Paper 2014 

The EPI White Paper 201455 showed that, while average payment terms had remained stable on 30 days 
in  PA2B  and  B2B  transactions,  since  2010  late  payment  had  decreased  slightly  in  terms  of  B2B 
transactions, whereas it had increased by 9 days in PA2B transactions. In fact, in 2014, the bad debt of 
the  construction  companies  had  increased  slightly  to  4%,  up  from  3.9%  in  2013.  For  example,  in 
Belgium,  61%  of  construction  companies  had  to  write  off  debt  in  2014  due  to  the  inability  to  collect 
payment.  

52 Data vailable 2012-2014 
53 Data available 2013-2014  
54 Royal Decree 635/2014, of 25 July 2014  
55 Intrum Justicia (2014): European Payment Index – white Paper, available at: 

http://www.intrum.com/Global/Countries/DE/Whitepaper_Engels_2014_ENG_Sec.pdf; hereinafter 
‘Intrum Justicia White Paper’. Intrum Justicia, White Paper  

48 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Evaluation of Late Payment Directive  

In  the  UK,  imposing  longer  payment  terms  or  delays  on  sub-contractors  and  suppliers  are  said  to  be 
“accepted  practices”.  In  a  survey  conducted  in  2012,  97%  of  the  250  responding  SMEs  in  the 
construction  sector,  reported  to  have  felt  “unfairly  treated”  by  main  contractors56.  In  Spain,  the 
construction sector is the sector with the highest percentage of companies paying within a period of over 
120  days  according  to  a  2012  survey.  At  the  same  time,  in  the  second  quarter  of  2014,  SMEs  in  the 
construction sector have seen the highest reduction in  average payment delays with a reduction of 2.3 
days compared to the previous quarter (reaching 95.1 days)57. In Poland, the debt of companies in the 
construction sector increased by nearly EUR 30 million (PLN 116 million) and is now at EUR 110 million 
(PLN 634 million) 58. The Italian construction sector is experiencing severe payments delays, which have 
increased by 178% in the last five years. ANCE (National Association of Property Developers) reported59 
that,  in  the  second  quarter  of  2014,  72%  of  enterprises  in  the  construction  sector  have  experienced 
payment delays. Overall, 39.8% of companies appear to be paying on the due date, whereas 46.3% pay 
within  a  delay  of  30  days60.  The  Austrian  construction  sector  has  the  longest  payment  delay  with 
around 50 days, which is above the average payment delay for the country. This is despite the fact that 
the sector enjoys the longest payment terms with an average of 33 days61. Construction is also a very 
important  sector  for  the  Irish  national  economy,  accounting  for  approximately  5%  of  GDP  in  201262. 
Yet, there has been a history of late and, in some cases, non-payment in the Irish construction industry. 
In  Belgium,  payment  practices  vary  greatly  across  sectors,  with  the  financial  services  and  services 
sectors  paying  with  the  shortest  delay.  In  contrast,  the  construction  sector  has  the  highest  number  of 
bad payers, amounting to 1.7 % (but still significantly lower than in other countries) (Cribis, 2013). 

Indeed, construction is commonly pointed out as one of the sectors suffering the most in regards to late 
payment  in  Europe.  Late  payment  has  been  an  important  matter  on  the  agenda  of  the  construction 
sector, especially since the onset of the economic crisis in 200863, which led many construction firms into 
bankruptcy in a relatively short time span. In 2012, 40% of invoices were paid within the due date and 
50% of invoices were paid with a delay of up to 30 days in the construction sector64. Data from the UK 
construction  and  building  sector  illustrated  that  65%  of  companies  had  liquidity  problems  due  to  the 
issue of late payment65.  

The  causes  for  late  payment  are  often  linked  to  specifics  of  the  sector.  According  to  the  Regulatory 
Impact  Analysis  of  the  Construction  Contract  Bill66,  the  issue  of  delayed  or  non-payment  in  the 
construction industry can be attributed to a variety of factors, such as: 

 

 
 

 

The  structure  of  the  sector  which  involves  long  value  chains  of  economic  operators  (e.g.  client, 
consultant,  main  contractor,  several  sub-contractors,  potentially  many  sub-sub-contractors, 
suppliers to all contractors and sub-contracts);  
The lack of credit;  
The sharp downturn in business levels in the sector over the past years and insolvency of many key 
players; and 
Increased competition for business as a result of a shrinking market leading to aggressively priced 
tender bids. 

In  addition,  the  industry  culture  seems  to  be  more  tolerant  than  in  other  industries.  For  example, 
stakeholders suggested that oral contracts in some cases “pay when paid clauses” (whereby contractors 
pay their sub-contractors only when they themselves have been paid), lack of clarity on payment dates 
and  in  some  cases  deliberate  non-payment  or  slow-payment  arrangements  are  more  frequent  in  the 
construction  sectors  than  in  others  which  also  has  an  important  role  on  the  perceived  impact  of  late 

56 Designing Buildings Wiki, http://www.designingbuildings.co.uk/wiki/ Remedies_for_late_payment 

_in_the_construction_industry 

57 More information available at: Boletin de Morosidad y Finaciacion Empresarial,  n. 2 (October 2014) 
58 More information available at: http://www.portalspozywczy.pl/technologie/wiadomosci/problemem-
branzy-spozywczej-sa-opoznienia-w-platnosciach-generowane-przez-sieci-handlowe,99648.html  
59 December 2014, Pagamenti della Pubblica Amministrazione: un Quadro in Chiaroscuro, con piu luci 

che ombre 

60 CRIBIS D&B (2015), Studio Pagamenti 
61 Atradius (2015): Country Report on Austria available at: 

http://global.atradius.com/paymentpractice/list/paymentpractices.html  

62 Forfas (2013), Ireland’s construction Sector: Outlook and strategic plan to 2015, available at  
http://www.forfas.ie/media/19072013-Irelands_Construction_Sector-Publication.pdf  

63 More information can be found at: http://www.fiec.eu/en/themes-72/late-payment.aspx 
64 CRIBIS D&B (2013) 
65 Intrum Justicia, White Paper 
66 Department of Public Expenditure and Reform (2011) : Summary of Regulatory Impact Analysis (RIA) 
Construction Contracts Bill 2010: http://www.per.gov.ie/wp-content/uploads/Regulatory-Impact-
Analysis-of-the-Construction-Contract-Bill.pdf  

49 

 
 
 
 
 
 
 
 
                                                 
Ex-Post Evaluation of Late Payment Directive 

payment in the construction sector. 

7.5.2.  Payments delays in PA2B transactions  

The  average  payment  delay  in  PA2B  transactions  decreased  by  1.8  days  in  2011-
2014  (see  Table  below)67.  At  the  same  time,  ten  MS  experienced  an  increase  in 
payment  delays  from  public  authorities68.  The  greatest  increase  in  delays  from 
public  authorities  was  seen  in  Spain,  where  delays  increased  by  13  days  between 
2011 and 201469. 

Table 9. Average payment delay in B2B transaction 2010 -2014 

Average payment delay (EPI) 

2011 

2012 

2013 

2014 

PA2B 
Source: Intrum Justitia, EPI (2011-2014) 

29.7 

29.4 

28.2 

27.9 

Almost  half  of  the  survey  respondents  have  not  noticed  any  change  in  payment 
delays  in  the  last  three  years  compared  with  only  1  in  3  who  have  seen  an 
improvement.  

At the same time, compared with the situation in B2B transactions, the regression 
indicates that companies that work primarily with public authorities are less 
likely to have seen a deterioration in payment delays over the past 3 years 
(odds  ratio  0.72).  This  is  confirmed  by  the  survey  results  which  show  that  10% 
more  companies  noticed  an  improvement  in  PA2B  transactions  than  in  B2B 
transactions (see figure below).  

Figure 13. Perceived change in average payment delays in the last three 
years 

Source: Company survey  

As mentioned in section 8.2.1, this result could be linked to the fact that some 
MS  have  made  additional  efforts  to  combat  late  payment  from  public 

67 While this decrease seesm small on its own, it should be seen in the context of decreasing payment 

terms in PA2B transactions over the same period. 

68 Based on EPI - Bulgaria (+5), Croatia (+2), Cyprus (+1), Czech Republic (+1), Estonia (+1), Greece 

(+3),  Latvia (+5), Romania (+1), Slovenia (+6), Spain (+13).  

69  Examining  data  on  the  average    payment  delays  from  public  authorities  between  2010  and  2014,  it 
can be noticed that the greatest increase was in Greece where the average payment delay increased 
by 40 (65 to 105). This is likely due to the impact of the financial crisis on the cash position of Greek 
public authorities.  However, in the same period, in parallel to an increase in payment delays there 
has also been a decrease of 40 days in the average payment terms. In other words, companies in 
Greece apply shorter payment terms but they need to wait longer for payments after the invoice is 
due. 

50 

 
 
 
 
 
 
                                                 
Evaluation of Late Payment Directive  

authorities.  For  instance,  in  the  Netherlands,  Ireland  and  the  UK,  a  prompt 
payment  code  in  the  public  sector  ensures  that  most  payments  in  PA2B 
transactions are made on time.  

Box 7. Case study: health sector 

Payment  delays  in  the  healthcare  sector  seem  to  have  increased  more  steeply  than  in  the 
construction sector. For instance, in the region of Catalonia in Spain, the average payment duration 
in  the  health  sector  was  150  days  following  receipt  of  the  invoice.  In  Italy,  the  health  sector  is 
perceived  as  one  of  the  sectors  most  affected  by  late  payment.  According  to  data  published  by 
Farmaindustria,  the  association  of  the  pharmaceutical  industry,  the  average  payment  durations  for 
the PA to pharmaceutical industries peaked at 262 days in September 2011. Payment durations have 
since decreased, dropping to 116 days in December 2014. However, in June 2015, average payment 
duration  had  increased  again  to  151  days70.  Trends  in  payment  durations  in  the  health  sector  vary 
greatly across regions in Italy and the situation appears to be critical especially in the South of Italy, 
where  payment  terms  for  supplies  in  the  health  sector  reached  794  days  in  2014,  as  reported  by 
Assobiomedica,  the  federation  of  companies  that  provide  medical  devices  to  private  and  public 
healthcare providers. 

The average payment delay in 2014 was 41 days in PA2B transactions whereas for B2B transactions 
the delay was 29 days, compared to 14 days in 201071.  

Average payment delay in the health care sector (in days)  

50

40

30

20

10

0

2010

2011

2012

2013

2014

B2B

PA2B

Source: Adapted from European Payment Index White Paper 2014 

Pan-European  data  show  that  65%  of  companies  active  in  the  health  sector  experienced  liquidity 
problems due to late payment. This could be explained that in addition to payment delays, companies 
active  in  the  sector  are  subjected  to  longer  payment  terms.  According  to  the  Directive,  public 
hospitals  have  twice  as  long  to  pay  private  contractors  than  other  governmental  bodies.  Running 
costs in  the health sector are generally large and according to stakeholders this  makes it difficult to 
meet  the  60  day  rule.  While  health  authorities  in  several  Member  States  are  already  paying  faster 
than  60  days  after  receiving  invoices,  stakeholders  in  some  Member  States  argued  that  public 
hospitals struggle to shorten payment periods. The main reason for this are problems with liquidity. 

Stakeholders  across  various  MS  agreed  however  that  in  public  health  care  payment  delays  are 
traditionally  higher.  This  view  was  shared  amongst  stakeholders  in  Ireland  who  stated  that  even 
though the payment duration within the central government have improved in recent years, the Irish 
Health Executive remains a slow payer.  

It is also important to note that by law, companies operating in the sector are obliged to supply goods 
– as a good of necessity – which exacerbates payment issues. Even if companies are not being paid 
on time, they still supply the goods as it is an ethical as well as a reputational issue.  

70 More information available at: http://www.farmindustria.it/index.php?option=com_jdownloads& 

Itemid=0&view=finish&cid=101821&catid=68  
71 No data was available on the average payment period. 

51 

 
 
 
 
 
 
 
 
 
 
                                                 
Ex-Post Evaluation of Late Payment Directive 

7.5.3.  Regional differences 

While  payment  durations  vary  importantly  from  one  country  to  another,  this  can 
also  be  true  for  regions  within  a  specific  country.  Two  clear  examples  of  such 
differences are Spain and Italy.  

  Spain  and  its  regions  provide  for  an  interesting  and  concrete  example  of 
differences  in  payment  terms,  in  particular  in  relation  to  public  bodies  and 
autonomous  communities.  La  Rioja  (32  days),  Galicia,  Navarra  and  the 
Basque  Country  (all  38  days),  are  the  communities  where  the  public 
authorities  pay  fastest.  On  the  contrary,  Catalonia  (138  days),  Comunidad 
Valenciana (135 days) and Andalusia (132 days) are the slowest payers.  
In Italy, regional differences are also considerable and the situation appears 
to  be  more  problematic  in  the  South  of  the  country  and  on  the  islands, 
compared with the rest of the country72.  

 

7.6.  Wider impacts of the Directive  

As  the  intervention  logic  in  Chapter  6  sets  out,  the  LPD  aims  to  reduce  payment 
periods,  facilitate  cross-border  trade  (by  reducing  the  perceived  risk  of  trading 
within the Single Market) and reduce business costs (by offering compensation and 
interest  in  case  of  late  payment).  This  should  reduce  bankruptcy  rates  and 
eventually  generate  a  positive  impact  on  growth  and  employment,  integration  of 
the  single  market  and  improved  financial  stability  and  competitiveness  of  the  EU 
economy.  

The previous sections have shown that the Directive has only had a limited impact 
on payment behaviour to date. Given that it has only recently come into force, that 
it  has  not  yet  led  to  clear  improvements  in  payment  behaviour    (sections  8.3  and 
8.4)  and  that  a  large  share  of  companies  do  not  exercise  their  rights  to 
compensation  or  interest  under  the  Directive  (section  8.2),  it  is  unsurprising  that 
measurable  wider  impacts  have  yet  to  materialise.  In  addition,  even  where  there 
are  improvements  in  relevant  indicators,  it  is  difficult  to  clearly  attribute  these  to 
the Directive.   

7.6.1.  Liquidity and cash flow 

One  of  the  key  objectives  of  the  Late  Payment  Directive  is  to  contribute  to  the 
improvement  of  financial  performance  (in  terms  of  e.g.  liquidity  and  cash  flow)  of 
European  businesses  and  especially  SMEs.  This  in  turn  should  lead  to  enhanced 
competitiveness  and  reduced  bankruptcy  rates.  There  are  many  reasons  why 
businesses  struggle  with  cash  flow  and  it  is  difficult  to  isolate  the  effectiveness  of 
the Directive in improving liquidity. 

Pan-European  data  show  that  the  number  of  companies  with  liquidity 
problems  has  risen.  Indeed,  as  much  as  57%  of  businesses  in  Europe  claim  to 
have problems with liquidity due to late payment, an increase of 10% since 201173. 
Furthermore,  according  to  EOS  surveys,  half  of  respondents  cited  cash  flow 
problems in the supply chain as the key reason for which they are paid late74.  

However, as industry stakeholders noted, there are a large number of reasons 
why  companies  struggle  with  cash  flow,  including  the  financial  crisis, 
availability of trade credit or poor internal credit control. During the financial crisis, 
for example, access to credit has been more restricted than it was before and this 

72 Intrum Iustitia, EPI, 2014 
73 More information can be found at: http://spectator.sme.sk/c/20046312/tackling-late-payments.html 
74 EOS Survey (2013): ‘European Payment Practices’ (hereinafter EOS 2013); EOS Survey (2014): 
European Payment Practices’ (Hereinafter EOS 2014); EOS Survey (2015): ‘European Payment 
Practices’ (Hereinafter EOS 2015). 

52 

 
 
 
                                                 
Evaluation of Late Payment Directive  

has  had  a  direct  bearing  on  company  liquidity.  Access  to  finance  is  important, 
especially  for  SMEs,  where  it  is  most  limited  and  expensive.  Worsening  access  to 
credit is one of the main problems SMEs have had to solve during crisis. According 
to  a  survey  by  the  Czech  Chamber  of  Commerce,  three  quarters  of  firms  had  to 
scale down their activities due to a lack of finance and more than half postponed or 
cancelled planned investments.75 

Liquidity  and  cash flow  can  be  both  a  cause  and  a result of  late  payment. 
Indeed,  as  a  result  of  limited  liquidity,  many  SMEs  are  not  able  to  pay  their 
suppliers before they are paid by their customers. Additionally, a large proportion of 
companies  are  forced  to  pay  invoices  later  because  they  are  not  able  to  generate 
sufficient  cash-flow76.  The  regression  analysis  shows  that  firms  with  PA2B 
customers  as  main  clients  are  more  likely  to  face  difficulties  paying 
suppliers within contractually agreed terms. This indicates that payment delays in 
PA2B can have an impact along the wider supply chain.  

late  payment, 

As a result of the multiple factors that determine company liquidity, alongside rules 
internal  credit  control  mechanisms  are  extremely 
on 
important. Creditors in commercial transactions, and particularly SMEs sometimes 
do  not  have  appropriate  credit  management  systems  for  preventing  or  managing 
late  payment  and  might  therefore  encounter  considerable  problems  in  regards  to 
funds recovery. Indeed, research conducted in the UK, shows that companies with 
strict credit control facilities are less likely to have a serious issue with late payment 
than  companies  with  informal  set-ups77.  In  fact,  internal  credit  control  is 
unstructured  for  many  SMEs,  which  lack  experience  of  dealing  with  late  or  bad 
payers. SMEs are also less likely to have an in-house credit controller dedicated to 
the recovery of outstanding funds. In fact, as many as 77% of SMEs in the UK have 
no  procedures  or  individuals  charged  with  the  organised  pursuit  of  bad  debt 
recovery78.  Creditors  may  also  benefit  from  employing  an  invoice  financing 
company to be in charge of cash flow management issues. Furthermore, new forms 
of electronic systems can have an important effect on reducing payment periods by 
providing  an  internal  and  automatic  credit  control  (e.g.  electronic  commerce 
invoicing and collection system – EICS, FreeAgent, Basware Pay).  

The  internal  organisation  and  financial  management  practices  of  debtors 
(including  public  authorities)  were  mentioned  by  many  stakeholders  as 
important factors impacting late payment. As shown in the table below, there 
are a number of ways in which payment surveillance can be implemented. Despite 
the  increasing  popularity  of  electronic  invoicing  manual  checking  remains  a 
common method, especially for SMEs.  

Table 10. Payment Surveillance Practices 

75 More information available at: http://www.visegrad.info/smes-and-innovative-

businesses/factsheet/smes -in-v4-countries.html 

76 Ibid.  
77  The  Guardian,  http://www.theguardian.com/small-business-network/2014/may/12/business-credit-
control-late-payments;  Forum  of  Private  Business,  2014,  https://www.fpb.org/press/may-
2014/late-payment-remains-concern-smes-despite-improving-economy-says-forum  

78  Satago,  more  information  available  at:  http://www.cashprotectionagency.co.uk/chasing-bad-debts-

too-awkward-for-1-in-3-smes.html   

53 

 
 
 
 
 
 
 
                                                 
Ex-Post Evaluation of Late Payment Directive 

Payment Surveillance Practices 
Manual 
checking 
(weekly) 

Manual 
checking 
(monthly) 

>250 staff 

<250 staff 

3.2% 

10.7% 

1.6% 

9.4% 

Automated 
system 
identifies  when 
invoices are due 

Automated 
system  which 
prepares  and 
sends invoices  

When  time 
is available 

Other  

61.9% 

45.3% 

6.3% 

6.9% 

0.0% 

27.0% 

1.9% 

25.8% 

Source: European Commission (2009): Impact assessment, COM (2009)126 final 

While the number of companies with liquidity problems has risen since the Directive 
came into force this can be due to the financial crisis, availability of trade credit or 
poor internal credit control. This has been particularly important during the financial 
crisis.  Given  the  challenging  economic  environment  and  the  fact  the  LPD  was 
implemented  only  recently,  it  is  unsurprising  that  improvements  in  liquidity  and 
cash flow of EU companies are yet to be seen.  

7.6.2.  Cross border transactions 

One of the key objectives of the Directive is to facilitate the smooth functioning and 
the  completion  of  the  internal  market  through  setting  a  common  legal  framework 
and  reducing  uncertainty  in  cross-border  commercial  transaction.  Late  payment 
may have a negative impact on cross-border trade as companies may be reluctant 
to do business with public authorities and businesses in other Member States due to 
the uncertainty in receiving payment.  

However,  little  evidence  was  found  so  far  on  the  effectiveness  of  the 
Directive in terms of reducing uncertainty in cross-border transactions. The 
regression results show that the share of turnover generated outside the domestic 
market is insignificant across all models run for this study. Furthermore, interviews 
with stakeholders across all MS found that late payment is not perceived as a major 
obstacle  to  cross-border  trade.  Rather,  it  is  the  economic  crisis  which  has  made 
commercial transactions with businesses from Southern MS appear more risky. As a 
result,  companies  sometimes  ask  for  advanced  payments  to  overcome  the  risk  of 
late payment (or no payment in the worst cases).  

7.7.  Unintended consequences of the Directive 

Across the consulted stakeholders in the Member States, there was little evidence 
of  any  unintended  consequences  of  the  Directive,  whether  positive  or 
negative. In some countries such as Finland and Slovenia, which have traditionally 
had  a  good  prompt  payment  culture,  the  Directive  is  believed  to  have  normalised 
longer  payment  periods.  Stakeholders in  these  countries  argued that  the  Directive 
may  have  given  larger  companies  more  leverage  to  demand  longer  payment 
periods.  

National  experts  mentioned  however,  that  due  to  the  short  time  period  since  the 
implementation  of  the  Directive,  there  has  been  very  limited  time  to  measure 
effects,  and  impacts  and  unintended  consequences  may  not  yet  have  been 
identified. 

54 

 
 
 
 
 
 
 
 
Evaluation of Late Payment Directive  

8.  RELEVANCE OF THE DIRECTIVE 

The  second  evaluation  question  to  be  addressed  relates  to  the  relevance  of  the 
Directive.  Broadly,  relevance  refers  to  the  extent  to  which  the  objectives  of  the 
Directive address an actual need for policy intervention. In this study, relevance is 
measured in terms of the perceived importance of the problem of late payments for 
businesses. 

Box 8 - Key points of this chapter 

Late  payment  remains  a  very  prevalent  and  important  issue  for 
companies across Europe. 

While  late  payment  experiences  vary  significantly  across  countries, 
industry stakeholders across all sectors agree that late payment remains 
an important issue after adoption of the Directive. 

The  results  of  the  Impact  Assessment  recommended  a  legislative 
solution  in  the  form  of  a  recast  of  the  former  late  payment  Directive 
(2000/35),  with  stricter  provisions,  to  tackle  the  ongoing  issue  of  late 
payment in commercial transactions. 

In  terms  of  the  Directive  itself,  some  concepts  should  be  clarified  in 
order to make it a more relevant tool to combat late payment. 

Given the multi-faceted nature of the problem, there can be no one size 
fits all legislative solution and the LPD can only be one measure among 
many in the fight against late payment. 

8.1.  Relevance of the problem of late payment 

First  of  all,  as  section  6  and  7  have  shown,  late  payments  remain  very  prevalent 
across  the  EU.  78%  of  companies  in  the  survey  sample  for  this  study  have 
experienced late payment in the last three years. Desk research confirms that 
while  the  average  payment  duration  in  both  PA2B  and  B2B  transactions  has 
decreased  since  the  implementation  of  the  Directive,  improvements  can  still  be 
made,  particularly  in  the  public  domain  where  average  payment  duration  remains 
well above the maximum payment limit provided by the Directive.  

Second, as section 6 has shown, when late payment does occur, its impact can 
be  devastating  for  the  creditor  company.  Late  payment  can  lead  to 
insolvencies  and  job  losses  and  it  is  a  particularly  important  issue  for  smaller 
companies.  

Third,  the  regression  analysis  carried  out  for  this  study  demonstrates  the 
relative  importance  of  different  drivers  of  late  payments.  As  the  logistic 
regression  results  show,  in  addition  to  the  company’s  age,  its  share  of  turnover 
from  sales  in  the  domestic  market  correlates  with  the  probability  of  experiencing 
late  payment  (although  the  magnitude  of  this  effect  is  very  limited).  However, 
experiences of late payment do not depend on the customer base of the company 
(e.g.  PA2B  only,  B2B  only  or  a  mix  of  both)79  and  there  are  no  statistically 

79 However, companies with public authorities as their main clients are less likely to have experienced a 

deterioration of average payment delays than other firms. 

55 

 
 
 
 
 
 
 
 
                                                 
Ex-Post Evaluation of Late Payment Directive 

significant  differences  in  the  likelihood  of  experiencing  late  payments  between 
sectors.80  

Furthermore,  as  section  6.3  has  already  shown,  country  variation  in  average 
payment  duration  is  significant  with  some  southern  European  Member  States 
experiencing  payment  delays  well  above  the  EU  average  (Italy,  Spain,  Greece, 
Portugal,  Cyprus)  compared  with  Nordic  countries.  Indeed,  controlling  for  all 
variables  included  in  the  regression  model,  the  odds  for  Greek  companies  of 
experiencing late payment are 30 times larger than for companies in the reference 
group.  Other  countries  where  the  country  specific  effect  was  significant  include 
many of the East European countries. 

Industry stakeholders across all sectors agreed that late payment remains 
an  important  issue  after  adoption  of  the  Directive.  Industry  associations  in 
inter alia Greece, Portugal, Spain, Italy and Romania suggested that the volume of 
outstanding  debt  from  public  authorities  has  the  biggest  impact  on  companies, 
whereas  business  representatives  in  inter  alia  Belgium,  Ireland,  the  Netherlands, 
Poland  and  the  UK  argued  that  the  most  significant  problem  related  to  B2B 
transactions. However, stakeholders across all countries noted that there is a need 
for a coordinated approach towards late payment as EU businesses need legislative 
support in creating a well-functioning market. 

It should be noted that the EU does not necessarily have the power to act in some 
aspects  related  to  late  payment.  As  indicated  in  the  Commission  Impact 
Assessment81    certain  problems  related  to  the  structure  of  national  or  regional 
markets  should  be  dealt  with  by  Member  States  while,  as  regards  the  business 
cycle,  most  economic  policy  levers  are  in  the  hands  of the  Member States  so that 
no  overall  solution  for  all  problem  causes  can  be  found  at  EU  level.  The  European 
Commission noted that well established national arrangements and the organisation 
and working of Member States' legal systems should be respected but the form of 
Community  action  should  be  as  simple  as  possible,  consistent  with  satisfactory 
achievement  of  the  objective  of  the  measure  and  the  need  for  effective 
enforcement. 

8.2.  Relevance of the provisions of the Directive 

Evidence collected through interviews with industry stakeholders shows that unclear 
definitions of key concepts: “grossly unfair” and “payment duration” are an obstacle 
to  the  effective  application  of  the  Directive.  Clearer  definitions  of  these  concepts 
would  make  the  Directive  even  more  relevant.  Additionally,  compensation  and 
interest are seen as too limited and not proportional to the claims at stake.  

Firstly,  across  various  Member  States  stakeholders  found  that  the  definition  of 
what constitutes grossly unfair was ambiguous and left too much scope for 
interpretation.  Industry  stakeholders  also  noted  that  smaller  companies  fear 
challenging  unfair  terms  as  they  fear  being  removed  from  the  supplier  list.  In  the 
UK,  in  2015,  the  Department  for  Business,  Innovation  and  Skills  issued  a 
consultation  on  the  definition  of  grossly  unfair.  A  vast  majority  of  respondents, 
including those representing SMEs, stated that late payment and unfair terms were 
an  issue82.  Moreover,  75%  of  respondents  indicated  that  they  had  noticed  an 
increase  in  the  use  of  “grossly  unfair”  terms  and  practices.  Respondents  also 

80 With the exception of financial services and agriculture which have a lower likelihood of late payments. 
81  European  Commission  (2009) :  Impact  assessment:  Directive  of  the  European  Parliament  and  the 
http://eur-lex.europa.eu/legal-

Payment, 

Council 
available 
content/EN/TXT/PDF/?uri=CELEX:52009SC03 15&from=EN 

on  Combating 

Late 

at: 

82 Department for Business, Innovation& Skills - BIS (2015): Challenging Grossly Unfair Payment Terms 

And Practices, Summary of Responses, June 2015 

56 

 
 
 
                                                 
Evaluation of Late Payment Directive  

provided  some  examples  of  the  term  used  in  practice  which  is  summarised  in  the 
box below. 

Box 9 - UK examples of grossly unfair terms 

A variety of terms considered as grossly unfair, many of which are sector specific: 

Lower interest rates for late payments 
Excessively long payment terms 
Flat fees/”pay to stay” 

o 
o 
o 
o  Discounts – either for prompt payment or applied retrospectively (“balance sheet 

bonuses”) 

o  Making a (sub)contractor responsible for, or unable to challenge, a decision that was 

made as part of a wider project or further up the supply chain 
o  Clauses which allow the payer/client to withhold or delay payment: 

o 

o 
o 

o 

o 

o 

By imposing the right to withhold money for losses that might occur in the 
future 
By setting off the money due on one contract for alleged breaches of another 
By exploiting complexities of the Construction Act payment provisions to 
prevent payments from becoming due 
By including provisions that make the payer the sole arbiter of whether the 
required quality has been achieved, allowing arbitrary deductions from the 
value of work performed or resulting in delays in payments 
By imposing administrative conditions, after work has started, as a precedent 
to payment 
- By imposing impracticable conditions precedent to the right to be paid for 
changes or extras 

Some other grossly unfair terms provided by respondents included: 

 

 

Exclusive remedy provisions – SME documents may exclude the SME from utilising any 
of the remedies available in general law and limit the SME only to those remedies 
expressed within the contract 
Pay-when-paid third party insolvency – the SME is asked to bear the financial brunt of a 
third party upstream becoming insolvent, when the SME has no visibility upstream to 
monitor the risk of that party becoming insolvent and its client is best placed to manage 
that risk 

Source: BIS (2015): Challenging Grossly Unfair Payment Terms And Practices 

Secondly, national industry stakeholders as well as European industry associations 
commented on the lack of clarity of the Directive on when the calculation of 
a payment term starts. Although, the Directive provides definitions of time limits, 
these  are  not  sufficiently  detailed.  There  are  different  practices  across  different 
sectors and across the EU. In some instances, the payment term is calculated from 
the issue of an invoice, whereas in other cases payment term start from the receipt 
of  goods.  The  stakeholders  consulted  maintained  that  it  would  help  to  have  more 
clarity in the Directive in regards to this issue.  

Table 11. Time limits in the Directive 

Time limits in the Directive  

Article 3 and Article 4 refer to the following time limits: 

- 

- 

- 

- 

 (i)  30  calendar  days  following  the  date  of  receipt  by  the  debtor  of  the  invoice  or  an 
equivalent request for payment; 
(ii)  where  the  date  of  the  receipt  of  the  invoice  or  the  equivalent  request  for  payment  is 
uncertain, 30 calendar days after the date of receipt of the goods or services; 
(iii) where the debtor receives the invoice or the equivalent request for payment earlier than 
the  goods  or  the  services,  30  calendar  days  after  the  date  of  the  receipt  of  the  goods  or 
services; 
(iv) where a procedure of acceptance or verification, by which the conformity of the goods or 
services  with  the  contract  is  to  be  ascertained,  is  provided  for  by  statute  or  in  the  contract 

57 

 
 
 
 
 
 
 
 
 
Ex-Post Evaluation of Late Payment Directive 

and if the debtor receives the invoice or the equivalent request for payment earlier or on the 
date on which such acceptance or verification takes place, 30 calendar days after that date. 

Source: Late Payment Directive 

Third,  recovery  procedures  for  unchallenged  claims  vary  across  Member 
States. The process of debt recovery does not fall within EU competence which is 
limited  to  judicial  cooperation  in  civil  matters  with  cross  border  implications. 
However the Directive does state that MS shall ensure that an enforceable title can 
be  obtained  within  90  calendar  days  of  the  lodging  of  the  creditor’s  action  or 
application to a court, provided that the debt is not disputed (Article 10)83. In some 
Member  States  similar  fast  track  procedures  were,  in  fact,  in  place  prior  to  the 
implementation  of  the  Directive  (e.g.  Sweden,  Denmark,  and  Spain)  though 
companies are often not aware of their existence. 

However  there  are  concerns  about  the  effectiveness  of  Article  10  in  some 
countries.  Indeed,  stakeholders  in  Spain,  Greece,  the  Netherlands,  Bulgaria,  and 
France  suggested  that  fast-track  procedures  are  limited  to  a  maximum  sum,  that 
the time required exceeds 90 days, and that they are too costly in proportion to the 
recovered debt. For example, a Spanish recovery procedure for unchallenged claims 
called  “Procedimiento  Monitorio”,  according  to  stakeholders,  rarely  complies  with 
the condition that the procedure should take no longer than 90 calendar days from 
the  lodging  of the  creditor's  application  at  the  court  or  other  competent  authority. 
At the same time, a recovery procedure for unchallenged claims in Sweden is well 
regarded  by  the  industry,  it  applies  irrespective  of  the  amount  of  the  debt,  and 
more than 82% of cases are concluded within 3 months84.  

Section  7  has  shown  that  the  awareness  of  the  right  to  claim  compensation  and 
interest  in  case  of  late  payment  is  high,  at  the  same  time,  these  tools  are  widely 
seen as too limited and not proportional to the claims at stake. While various 
interviewees  mentioned  that  the  principle  of  compensation  is  positive,  in  the  vast 
majority of cases the amount of €4085 is not proportional to the damages suffered 
due  to  late  payment  and  an  increase  in  the  minimum  compensation  should  be 
considered, especially given the risk of damaging commercial relationships.  

Of  course,  the  compensation  set  in  the  Directive  provides  only  a  minimum  and 
companies  or  national  authorities  can  specify  higher  amounts  in  their 
contracts  or  in  national  law.  For  instance,  in  Belgium,  one  industry  association 
mentioned  that  companies  often  specify  their  own  interest  rate  and  compensation 
fees  in  the  general  conditions  and  that  these  tend  to  be  higher  than  the  minima 
prescribed in the Directive (generally 12% interest and 10% for  the compensation 
fee)86  

Together,  the  findings  of  desk  research,  company  survey  and  interviews 
show that late payment remains an important issue after the adoption of the 
Directive  and  stakeholders  underlined  that  there  is  a  strong  need  for  continued 
policy intervention. Indeed, legislation provides economic operators with support in 
their  effort  to  promote  timely  payment  of  invoices.  However,  the  results  confirm 
that the causes of late payment are quite diverse, with no one size fits all solution. 
Put  differently,  the  LPD  –  though  it  addresses  an  issue  that  continues  to  be  very 
relevant, can only provide part of the solution to the problem of late payments. 

83 Directive 2011/7/EU, Article 10 
84  SOU  2012:11,  available  at:  http://www.regeringen.se/contentassets/ddd03505d8c140a7b253fa9a8b 

94cae9/snabb are-betalningar-hela-dokumentet-sou-201211  

85 Or equivalent in MS outside Eurozone 
86  Furthermore,  companies  in  some  Member  States  (Germany,  Netherlands,  and  Luxembourg)  use 
discounts  for  timely  payment  as  an  alternative  to  compensation  for  late  payment.  For  instance,  in 
Luxembourg,  companies  can  offer  clients  a  2%  discount  when  they  pay  within  15  days  and  this 
system is reported to work well by one business association. 

58 

 
 
 
                                                 
Evaluation of Late Payment Directive  

59 

 
 
 
 
 
 
 
 
 
Ex-Post Evaluation of Late Payment Directive 

9.  EFFICIENCY OF THE DIRECTIVE 

The third evaluation dimension relates to the efficiency of the Directive. Efficiency is 
measured in terms of: 

  The  extent  to  which  regulatory  costs  are  proportionate  to  the  benefits 

achieved 

  The  extent  to  which  regulatory  costs  (including  administrative  burden) 

have been reduced through the implementation of the Directive 

  The  aspects  of  the  Directive  that  are  the  most  efficient  or  inefficient, 
especially  in  terms  of  resources  that  are  mobilised  by  stakeholders 
during the different phases of the process 

  The administrative and reporting burdens on stakeholders.  

There are four types of costs that need to be considered: costs to business in terms 
of  reporting  and  administrative  burden,  costs  to  public  authorities  related  to  the 
transposition  and  implementation  of  the  Directive,  costs  to  the  public  purse 
associated  with  voluntary  measures  that  are  linked  to  the  Directive,  and  costs  to 
business of any activities that result directly from the Directive (i.e. the exercise of 
rights granted by the Directive).87 

Box 10 - Key points of this chapter 

There  are  no administrative or  reporting  burdens  resulting  directly  from 
the Directive and companies consider the LPD to be efficient. 

There  are  also  no  regulatory  costs  stemming  from  the  transposition  of 
the Directive 

All costs to public authorities as a result of the Directive are one-off and, 
on  the  whole,  they  are  considered  marginal  by  the  authorities 
themselves 

Set  against  these  negligible  costs,  the  Directive  has  the  potential  to 
deliver  significant  benefits,  estimated  at  up  to  EUR  158m  for  each  one-
day reduction in payment delays. 

9.1.  Costs for businesses as a result of the Directive 

There  are  no  administrative  or  reporting  burdens  resulting  directly  from 
the Directive. Indeed, the only direct cost to business as a result of the Directive 
relates  to  a  one-off  requirement  for  businesses  having  to  familiarise  themselves 
with  the  legislation.  This  view  (of  negligible  costs  to  business)  was  largely  shared 
among  industry  stakeholders:  the  Directive  has  not  resulted  in  any  specific 
additional requirement that companies need to adjust to.  

The Directive provides two important legal tools that can be applied by companies 
in case of late payment, i.e. the possibility of claiming interest and a compensation 
fee  for  recovery  costs.  In  line  with  the  fact  that  there  are  no  costs  directly 
associated with them, companies consider these provisions as generally quite 
efficient.  

Rather  than  the  provisions  of  the  Directive,  the  costs  of  late  payment  for 
companies are linked to chasing late payers, taking cases to ADR or court 
or  external  debt  recovery.  These  costs  fall  outside  the  scope  of  the  current 

87 It should be noted that consulted stakeholders were not able to provide any actual figures on costs. A 
detailed desk research also did not result in any quantitative estimates. As a result, this section is 
largely based on qualitative data. 

60 

 
 
 
 
                                                 
Evaluation of Late Payment Directive  

Directive, they vary widely depending on national judicial procedures and processes 
and they were pertinent before the Directive came to force.88. Nevertheless, for the 
sake of completeness, the box below briefly discusses each of these follow-on costs 
for businesses that exercise the rights conferred unto them by the Directive. 

Box 11 - Cost of follow-on actions in case of late payment 

Chasing late payment  

First  the  costs  of  chasing  late  payments  include  administrative  burden  generated  through  follow  up 
actions  such  as  sending  and  receiving  reminder  invoices  or  using  external  help  in  recovery  of  unpaid 
debt.  Evidence  suggests  that  smaller  firms  typically  spend  the  longest  chasing  late  payments;  around 
1.65 hours per day89. In the UK, prior to the implementation of the Directive, it was estimated that the 
total  costs  of  chasing  late  payment  in  £  107  million  (€145  million)  per  year.  The  UK  authorities 
estimated that the cost of chasing late payment is approximately £5000 per small business. According to 
them only 2.2% of businesses are paid late and go on to chase this late payment using legislation.  

Debt recovery  

Another type of costs that is associated with late payment is the cost of debt recovery. Again, although 
the  consultation  shows  that  this  cost  is  important  for  stakeholders,  it  falls  outside  the  scope  of  the 
Directive.  

For  smaller  sums,  companies  tend  to  avoid  involving  external  legal  advice  or  debt  collection  agencies 
because of the potential costs of these procedures. When the sums are low, companies aim to solve the 
issue through dialogue and resort to legal advice– internally or externally – only when amicable solutions 
fail.  In  this  context,  stakeholders  mentioned  the  Small  Claims  Procedure  as  an  efficient  method  of 
recovering unpaid invoices.  

ADR and court procedures  

Interviews show that costs linked to ADRs and court procedures are important for  the companies. Legal 
proceedings  and  the  pace  of  proceedings  are  seen  as  a  prohibitive  in  relation  to  the  amounts  that  can 
often  be  claimed.  Although  these  costs  cannot  be  reduced  through  the  Directive,  facilitation  of  a  less 
time  consuming  claim  system  would  help  stakeholders  use  the  Directive  and  exercise  their  rights.  This 
view was largely shared throughout the interviews - a support structure e.g. an easy way of recovering 
late payment, either through ADR, the court system or both, is needed, in particular for SMEs. 

9.2.  Costs to public authorities 

There  are  no  regulatory  costs  stemming  from  the  transposition  of  the 
Directive, notably related to Article 12.1. The EU impact assessment carried out in 
view of the adoption of the Directive did not mention any specific costs in regards 
to  public  authorities90.  Consulted  public  authorities  shared  the  view  that  the 
Directive’s  transposition  was  a  standard  legislative  procedure,  and  as  such 
business-as-usual. None of the consulted experts could provide any data on costs, 
and  desk  research  in  the  UK91  and  Denmark92,  where  national  level  impact 

88 Indeed, to the extent that the Directive succeeds in combating late payment, these costs could in fact 

decrease as a result of the legislation 

89 BIS (2012): Impact Assessment: Directive of the European Parliament and the Council on Combating 
https://www.gov.uk/government/uploads/system/uploads/ 

Late 
attachment_data/file/32706/12-1132-impact-directive-on-combating-late-payment.pdf 

available 

Payment 

at: 

90 Impact assessment (2009): Directive of the European Parliament and the Council on Combating Late 
Payment, available at: http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52009SC03 
15&from=EN 

91 BIS (2012): Impact Assessment: Directive of the European Parliament and the Council on Combating 

Late Payment 

92 DK Ministry of Justice(2012): Gennemførelse af direktivet om bekæmpelse af forsinket betaling i 

handelstransaktioner Report 1535, available at: 
http://jm.schultzboghandel.dk/upload/microsites/jm/ebooks/bet1535/pdf/bet1535.pdf 

61 

 
 
 
 
 
 
 
 
                                                 
Ex-Post Evaluation of Late Payment Directive 

assessments  were  undertaken,  showed  that  no  regulatory  costs  were  identified. 
This view was reinforced during interviews with public authorities.  

Costs  for  public  authorities,  if  any,  relate  to  awareness  raising,  information 
campaigns  and  electronic  invoicing  (i.e.  Article  8  of  the  Directive  on  prompt 
payment  codes,  awareness  raising,  etc.).  In  particular  it  is  worth  mentioning 
potential  costs  in  relation  to  the  introduction  of  electronic  invoices  (e.g.  in  Austria 
and  Italy).  While  there  might  be  an  initial  cost  for  the  introduction  of  such  a 
system,  including  potential  training,  technical  support  or  extra  staff,  in  the  long 
term,  this  should  lead  to  improved  organisation  and  more  timely  management  of 
invoices. Furthermore, in some countries, electronic invoicing was already in place 
before the Directive was transposed into national law (i.e. Sweden).  

Generally, however all costs to public authorities as a result of the Directive 
are  one-off  and,  on  the  whole,  they  are  considered  marginal  by  the 
authorities themselves. In addition, because these measures are voluntary, it is 
ultimately up to each country to decide whether to invest in any measures related 
to Article 8 or not and hence it is not possible to attribute all resulting costs directly 
to the Directive. 

9.3.  Comparing costs and (potential) benefits  

Compared  with  these  negligible  costs,  the  Directive  could  lead  to 
substantial benefits even if there are only moderate reductions in average 
late  payments.  In  its  Impact  Assessment  accompanying  the  Late  Payment 
Directive,  the  Commission  estimated  that  a  total  of  EUR  1,864  billion  in  company 
turnover  are  paid  late  each  year.93  Assuming  that  companies  need  to  finance  the 
entirety  of  these  late  payments  using  overdraft  facilities  offered  by  their  financial 
institutions, this would lead to a total cost of about EUR 158 million per day of late 
payment.94  

Put  differently,  each  day  of  reduction  in  late  payment  that  the  Directive 
delivers,  saves  European  companies  EUR  158  million  in  finance  costs  that 
they  would  otherwise  have  incurred.  It  should  be  noted  that  these  estimates 
are  based  on  a  large  number  of  assumptions,  they  need  to  be  interpreted  with 
caution and they should only be seen as an indication of the order of magnitude of 
costs related to late payments. 

93 

See 

http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52009SC0315&from=EN. 
Actually  the  IA  does  not  specify  whether  this  is  an  annual  cost  but  it  is  based  on  annual  Eurostat 
turnover data which suggests that the figure should be seen as annual. 

94 See http://sdw.ecb.europa.eu/reports.do?node=1000002883. The interest rate used in this calculation 
is the December 2014 figure for « revolving loans and overdrafts, convenience and extended credit 
card credit ». 

62 

 
 
 
 
 
                                                 
Evaluation of Late Payment Directive  

10. COHERENCE AND COMPLEMENTARITY OF THE DIRECTIVE 

The fourth evaluation dimension relates to coherence and complementarity between 
the Directive and other interventions at EU and international level.  

Box 12 - Key points of this chapter 

There  is  no  evidence  of  contradictions  between  the  Directive  and  any  other  EU 
relevant actions for combating late payment  

There are a number of EU actions that complement the objectives of the Directive 
such as the European Small Claims Procedure.  

In  the  context  of  cross-border  transactions,  there  could  be  some  overlap  between 
the Directive (Article 10) and the European Payment Order Procedure 

There is no evidence of contradictions between the Directive and any other 
EU relevant actions for combating late payment. The general objectives of the 
Directive are to improve European competitiveness, and to facilitate the functioning 
of  the  internal  market  through  the  elimination  of  barriers  related  to  cross-border 
commercial transactions. This is coherent with a number of EU initiatives such 
as  the  Lisbon  Partnership  for  Growth  and  Jobs,  the  Small  Business  Act,  and  the 
European  Economic  Recovery  Plan.  However,  as  a  result  of  compliance  with  the 
terms  provided  by  the  Directive,  some  Member  States  could  have  had  problems 
with the Stability and Growth Pact (SGP).  

At  the  same  time,  there  are  a  number  of  EU  actions  that  complement  the 
objectives of the Directive. For example, within the context of providing ways for 
recovering  debt,  the  European  Small  Claims  procedure  was  mentioned  as  of 
particular  importance,  also  in  cross  border  disputes.  Additionally,  Member  States 
implemented  a  number  of  voluntary  actions,  the  importance  of  which  was 
highlighted by industry, especially with regards to awareness and the commitment 
to prompt payment by central government (see Section 6). 

The  overarching  purpose  of  the  Directive  is  to  improve  business  cash  flow  in  EU 
Member States, and to facilitate the functioning of the internal market through the 
elimination  of  barriers  related  to  cross-border  commercial  transactions.  Another 
important  objective  is  to  contribute  to  the  development  and  improvement  of  the 
Single  Market.  More  specifically,  the  Directive  on  late  payment  in  commercial 
transactions  contributed  to  the  achievement  of  goals  enshrined  in  the  renewed 
“Lisbon  Partnership  for  Growth  and  Jobs”.  Moreover,  timely  payment  in 
commercial transactions is included in the “Small Business Act” (SBA) as one of 
ten  principles  to  guide  the  conception  and  implementation  of  policies  both  at  EU 
and  Member  State  levels.  These  are  essential  to  bring  added  value  at  EU  level, 
create  a  level  playing  field  for  SMEs  and  improve  the  legal  and  administrative 
environment 
the 
implementation  of  the  European  Economic  Recovery  Plan  by  providing  an 
important impetus to overcome the current economic crisis. The crucial role of the 
Directive  was  recently  noted  in  the  “Regulatory  Fitness  and  Performance 
Programme  (REFIT)”,  where  it  is  considered  as  one  of  the  initiatives  to  simplify 
EU law and to reduce regulatory costs. 

the  EU.  The  Directive  also  contributes 

throughout 

to 

On the other hand, within the context of the Stability and Growth Pact (SGP) the 
requirement for public authorities to pay within 30 (or maximum 60) calendar days 
could  lead  to  deficit  or  public  debt  issues  in  violation  of  the  SGP.  A  number  of 

63 

 
 
 
 
 
 
 
 
Ex-Post Evaluation of Late Payment Directive 

industry  representatives  in  e.g.  Italy  argued  that  it  is  possible  that  some  public 
authorities  deliberately  delayed  payment  to  comply  with  deficit  rules.  At  the  same 
time,  the  Italian  government  implemented  Decreto-Legge  66/2014  stressing  the 
importance  of  paying  on  time.  For  example,  PAs  are  obliged  to  monitor  their 
payments and if their delay on average goes beyond 60 days, they are not allowed 
to hire new staff the following year. 

Debt recovery 

The process of debt recovery does not fall within EU competence which is limited to 
judicial cooperation in civil matters with cross border implications. In the context of 
late payment, three other elements at EU level complement the efforts of the LPD: 

  European Enforcement Order, 
  European Payment Order, and  
  European Small Claims Procedure 

The  Late  Payment  Directive,  notably  Article  10  should  be  without  prejudice  to  the 
provisions  of  Regulation  (EC)  No  1896/2006  establishing  the  European  order  for 
payment95. However, in the context of cross-border transactions, there could 
be  some  overlap  between  the  Directive  (Article  10)  and  the  European 
Small  Claims  Procedure.  The  ESCP  is  available  to  litigants  as  an  alternative  to 
the procedures existing under the laws of the Member States. The procedure can be 
used  for  claims  up  to  the  value  of  EUR  2,000.  A  judgment  given  in  the  European 
Small  Claims  Procedure  is  recognised  and  enforceable  in  another  Member  State 
without  the  need  for  a  declaration  of  enforceability  and  without  any  possibility  of 
opposing  its  recognition.  The  only  reason  that  enforcement  in  another  Member 
State  can  be  refused  is  if  it  is  irreconcilable  with  another  judgment  in  the  other 
Member  State  between  the  same  parties.  Enforcement  takes  place  in  accordance 
with the national rules and procedures of the Member State where the judgment is 
being enforced. 

SME  representatives  in  Ireland  claimed  that  the  European  Small  Claims  Procedure 
(ESCP) can be of particular importance to companies. The interviewees noted that 
even  though  it  is  relatively  quick  to  recover  debts  through  this  procedure,  its 
limitation lies in a low maximum value of claim (EUR 2,000). The limited statistical 
data  available  indicates  that  very  few  ESCP  cases  are  being  filed  (around  100  per 
Member  State  each  year)96.  A  recent  proposal  for  amending  the  regulation 
recommended raising the maximum allowable claim to EUR 10,000 to improve the 
effectiveness of the ESCP.97  

In  addition  to  ESCP,  21  EU  Member  States  have  small  claim  procedures  in  place, 
although these national systems vary from one country to another, both in terms of 
the  actual  procedures  as  well  in  terms  of  the  maximum  debt  amounts  that  they 
consider98. For instance, in Germany, small claims procedures can be used for sums 
not  exceeding  EUR  600,  while  in  the  Netherlands  the  sum  cannot  exceed  EUR 
25,000. 

95 The European order for payment is recognised and enforced in all EU countries except Denmark. 
96 European Parliament (2014): European Small Claims Procedure, Legal analysis of the Commission’s 

proposal to remedy weaknesses in the current system 

97 European Commission (2013): Proposal amending the European Small Claims Procedure, available at: 

http:// 
www.europarl.europa.eu/oeil/popups/ficheprocedure.do?reference=2013/0403%28COD%29&l=en 

98 European Commission (2013): Assessment of the socio-economic impacts of the policy options for the 

future of the European Small Claim Procedure 

64 

 
 
 
 
 
                                                 
Evaluation of Late Payment Directive  

Awareness raising 

Apart  from  procedures  for  recovering  debt,  two  EU  awareness  raising  actions 
also complemented the objectives of the Directive.  

First, in 2012, the European Commission launched an “Information campaign” to 
increase awareness amongst European stakeholders, in particular SMEs, and within 
public authorities about the rights conferred by Directive 2011/7/EU. This campaign 
was organised in the 28 Member States and it ran from October 2012 to July 2014. 
Organised  events  provided  a  forum  for  the  exchange  of  best  practices  to  help 
businesses  tackle  late  payment  issues.  Speakers  involved  inter  alia  the  national 
authority  in  charge  of  the  transposition  of  the  Directive,  national  and  regional 
experts, credit managers and debt collectors and members of the Enterprise Europe 
Network  (EEN).  Invitations  to  the  events  were  sent  to  organisations  representing 
SMEs,  policy  makers  from  the  national  or  regional  authorities,  chambers  of 
legal 
commerce,  business  associations,  entrepreneurs,  economic  operators, 
professions and the judiciary. 

Second,  the  European  Commission  organised  a  “Pilot  project  on  the  rapid  and 
efficient  enforcement  of  outstanding  claims  by  SMEs  operating  across 
borders”.  The  general  objective  of  the  project  was  to  support  SMEs  operating 
cross-border  by  facilitating  cross-border  debt  recovery.  The  aim  was  to  improve 
access  to  information  on  claim  management  instruments  and  options.  In  addition, 
the  initiative  aimed  to  improve  the  use,  understanding  and  awareness  of  the 
available legal instruments. The project included the following actions: 

  The publication of a practice-based guide on claims management and on 
for  cross-border 

instruments 

legal 

the  application  of  existing 
enforcement of claims. 

  The  organisation  of  seminars  in  the  28  Member  States  to  provide  SMEs 
with information on credit and claims management and on the available 
legal  instruments.  The  seminars  took  place  from  March  2013  to  June 
2014. 

  The  preparation  of  teaching  modules,  the  content  of  which  can  be 
integrated into advanced vocational training and the advanced training of 
young entrepreneurs. 

Invitations  to  the  events  were  sent  to  organisations  representing  SMEs,  chambers 
of  commerce,  business  associations,  entrepreneurs,  economic  operators,  legal 
professions and the judiciary. 

65 

 
 
 
 
 
 
 
 
 
Ex-Post Evaluation of Late Payment Directive 

11. EU ADDED VALUE OF THE DIRECTIVE  

This section introduces evidence from the stakeholder consultation regarding the EU 
added value of the Directive. This section explores the following dimensions of EAV: 

  whether the Directive’s objectives could have been achieved without EU 

intervention; and  

  what would be the most likely consequences of stopping or repealing this 

Directive. 

Box 13 - Key points of this chapter 

There  is  a  general  consensus  among  industry  and  national  authorities  that  the 
Directive generates significant added value. 

Despite limited changes in payment behaviour that are directly attributable to the 
Directive, the added value of the LPD is to ensure that the issue of late payment 
remains at the top of the political agenda in Europe. 

The Directive has also harmonised practices and provided a level playing field for 
companies across the Single Market. 

Furthermore,  public  authorities  see  added  value  in  monitoring  changes  in 
payment duration and further cooperation among MS to exchange best practices. 

None of the stakeholders requested or suggested the repeal of the Directive. 

There is a general consensus among industry and national authorities that 
the  Directive  generates  significant  added  value.  National  authorities  and  the 
industry  representatives  across  three  sectors  (construction,  health  care  and  food) 
suggest that the impacts of the Directive would have been unlikely to be achieved 
by  Member  States  individually.  Indeed,  stakeholders  agreed  that  by  introducing 
payment terms for both B2B and PA2B transactions and the right to claim interest 
and  compensation,  the  Directive  harmonised  practices  and  provided  a  level 
playing field for companies across the EU. Despite a few national derogations, 
uniformity in payment terms was enhanced to the extent possible across the Single 
Market.  

In  addition  to  the  legislative  provisions  themselves,  the  added  value  of  the 
Directive is to ensure that the issue of late payment remains at the top of 
the  political  agenda  in  Europe.  While  stakeholders  across  sectors  (inter  alia 
Ireland, Spain, Poland, the UK) noted that the problem itself cannot be resolved by 
a  legislative  intervention  only,  the  LPD  sends  out  a  strong  message  that  the 
problem of late payments is being  investigated and addressed. Indeed, the 
mere existence of EU legislation might even have an impact on payment culture in 
some countries, where the problem of late payment still exists.  

Finally, public authorities see added value in the monitoring of changes in 
payment  duration.  According  to  them,  a  common  measurement  methodology 
would  further  enhance  value  added,  as  progress  could  be  measured  in  a  more 
uniform  way  within  and  across  MS.  A  better  understanding  of  the  evolution  of 
payment  delays  what  works  and  what  does  not,  in  turn,  enhances  cooperation 
between  MS  and  the  possibility  to  exchange  best  practices.  For  instance,  the 
Directive  introduced  a  possibility  for  MS  to  have  voluntary  measures,  and  there  is 
an  interest among  all  MS  in  exchanging  information  regarding  the effectiveness  of 
these measures.  

None  of  the  stakeholders  requested  or  suggested  the  repeal  of  the 
Directive.  Such  a  move  would  indeed  risk  greater  fragmentation  of  the  internal 

66 

 
 
 
 
Evaluation of Late Payment Directive  

market and a move toward national payment terms in B2B and PA2B transactions. 
The reasons for this are twofold: 

  Some MS could value freedom to contract above uniform payment rules 
thus potentially eliminating regulation of payment terms. This would lead 
to divergent and possibly longer payment terms across the EU.  

  Responses  to  the  current  economic  crisis  and  the  pressures  that  the 
national  budget  is  exposed  to  could  introduce  longer  payment  terms  in 
PA2B  transactions.  This  could  negatively  impact  the  internal  market  as 
enterprises  across  the  EU  would  suffer  different  (and  longer)  payment 
terms.  

Furthermore,  if  the  Directive  was  repealed,  it  is  likely  that,  over  time,  the 
application of the statutory interest rate for late payment would vary within the EU. 
The Directive guarantees that interest can be charged. However, charging interest 
for late payment is only a possibility and not an obligation under the Directive. It is 
therefore  important  that  this  possibility  exists  throughout  the  EU  to  give  creditors 
useful tools to encourage timely payment for goods and services.  

67 

 
 
 
 
 
 
 
 
 
 
 
Ex-Post Evaluation of Late Payment Directive 

12. CONCLUSIONS  

Context 

Almost  three  out  of  four  (78%)  companies  in  Europe  have  experienced  late 
payments in the last three years with SMEs likely to be disproportionately affected 
by  this  phenomenon.  Indeed,  late  payment  can  lead  to  insolvency  and  job  losses, 
and it can negatively affect public procurement and cross-border trade.  

The  drivers  of  late  payment  behaviour  are  multi-faceted  with  the  most  significant 
aspects being business culture/norms, external economic conditions (e.g. the crisis) 
and power imbalances in the market.  

State of Play  

In  addition  to  the  LPD,  which  sets  out  minimum  EU-level  measures,  a  number  of 
MS  have  introduced  stricter  provisions  and  promoted  complementary  initiatives  at 
national  level  to  combat  late  payment.  Among  these,  prompt  payment  codes  and 
specific sector initiatives are seen as particularly promising.  

At  the  same  time,  thirteen  infringement  procedures  were  launched  so  far  by  the 
Commission against MS in the context of the LPD. 

Effectiveness  

Almost  two  thirds  of  companies  are  aware  of  the  (general)  rules  regulating  late 
payments  and  86%  of  companies  know  about  their  right  to  claim  compensation 
and/or  interest.  SMEs  and  younger  firms  are  less  likely  to  be  aware  of  the  rules 
regulating late payment. 

Awareness of the rules, on its own, does not prevent companies from experiencing 
late payments. Indeed, four out of five companies that experienced a late payment 
in the last three years were aware of the possibility to claim compensation and/or 
interest. However, firms that are aware of the rules related to late payment are less 
likely to have experienced a deterioration of average payment delays over the last 
three years compared to companies that are not aware of the rules. 

Despite relatively high awareness levels, usage of the provisions of the Directive is 
not widespread. 60% of respondents indicated that they never exercise their rights 
to claim interest and/or compensation fees for recovery costs. SMEs are much less 
likely to exercise their rights under the Directive than larger companies. 

At the same time, in countries with a shorter average payment duration, companies 
are  more  likely  to  always  exercise  their  rights.  Thus,  in  this  sense,  the  Directive 
seems  to  be  a  more  effective  instrument  for  companies  in  countries  where  the 
problem of late payment is less severe.  

The  main  reason  for failing  to  exercise  their  rights under the Directive is  the  fear, 
among  creditor  firms,  of  damaging  good  business  relationships.  Lack  of  efficient 
remedy  procedures  is  another  barrier  preventing  companies  from  exercising  their 
rights to compensation and interest. 

Payment duration has decreased by a small extent in recent years in both PA2B and 
B2B  transactions  but  very  significant  differences  remain  across  countries.  MS  with 
above  average  payment  duration  in  PA2B  transactions  also  tend  to  have  above 
average payment durations in B2B transactions.  

While  it  is  difficult  to  isolate  the  reasons  for  this  progress,  there  is  little  evidence 
that the Directive has had an impact on payment behaviour and the practice of late 
payment. 

For B2B transactions, average payment duration in the European Union has indeed 
decreased from 56 days in 2011 to 47 days in 2014. In terms of average payment 
delays, there has only been a small decrease in B2B transactions (from 20.5 days 

68 

 
 
Evaluation of Late Payment Directive  

in 2011 to 19.3 days in 2014). At the same time, there continues to be significant 
cross country variation in both average payment duration and delays. 

Ninety percent of companies apply payment terms of 60 days or less as required by 
the  Directive.  In  addition,  more  than  two  thirds  (70%)  of  companies  indicate  that 
their payment terms do not exceed 30 days. Country and sector affiliation are more 
important  drivers  of  payment  terms  than  other  company  characteristics  or 
awareness  of  the  rules  around  late  payment.  Companies  in  manufacturing  and 
construction  have  payment  terms  that  are  on  average  more  than  10  days  longer 
than companies in other sectors.  

As for PA2B transactions, average payment duration in the EU has decreased (from 
65 days in 2011 to 58 days in 2014), but it stays well beyond the terms set out by 
the  Directive  and  10  MS  actually  experienced  an  increase  in  payment  delays  from 
public  authorities.  At  the  same  time,  companies  that  work  primarily  with  public 
authorities are less  likely to have seen a deterioration in payment delays over the 
past  three  years  than  those  that  have  primarily  other  businesses  as  their 
customers.  

Country and sector effects are more important drivers of payment terms than  any 
other company characteristics or awareness of the rules around late payment. 

Rather  than  legislation,  national  business  culture,  economic  conditions  and  power 
imbalances are the driving factors for payment behaviour.  

There is not yet evidence on the effectiveness of the Directive in terms of reducing 
uncertainty in cross-border transactions.  

Relevance  

Despite  differences  in  payment  behaviour  across  countries,  industry  stakeholders 
across all sectors agree that late payment remains a highly relevant issue.  

In 2009, the results of the Impact Assessment recommended a legislative solution 
in the form of a recast of the former late payment Directive (2000/35), with stricter 
provisions, to tackle the ongoing issue of late payment in commercial transactions. 

This study shows that, in order to improve the relevance of the current Directive as 
a  tool  to  combat  late  payment,  a  number  of  aspects  could  be  clarified  within  the 
legislation itself. 

First, the definition of what constitutes grossly unfair is seen as ambiguous with too 
much scope for interpretation. 

Second, there is a lack of clarity regarding when the calculation of a payment term 
starts.   

There are also concerns regarding recovery procedures which vary across MS. 

Finally, given the multi-faceted nature of the problem, there can be no one size fits 
all  legislative  solution  and  the  LPD  can  only  be  one  measure  among  many  in  the 
fight against late payment. 

Efficiency  

There  are  no  administrative  or  reporting  burdens  resulting  directly  from  the 
Directive.  Indeed,  the  only  direct  cost  to  businesses  as  a  result  of  the  Directive 
relates  to  a  one-off  requirement  for  businesses  having  to  familiarise  themselves 
with the legislation.  

69 

 
 
 
 
 
 
 
Ex-Post Evaluation of Late Payment Directive 

There  are  also  no  regulatory  costs  stemming  from  the  transposition  of  the 
Directive. All costs to public authorities as a result of the Directive are one-off and, 
on the whole, they are considered marginal by the authorities themselves. 

Set  against  these  negligible  costs,  the  Directive  has  the  potential  to  deliver 
significant benefits, estimated at up to EUR 158 million for each one-day reduction 
in payment delays. 

Coherence and complementarity  

There  is  no  evidence  of  contradictions  between  the  Directive  and  any  other  EU 
relevant actions for combating late payment  

There are a number of EU actions that complement the objectives of the Directive 
such as the European Small Claims Procedure.  

However, in the context of cross-border transactions, there could be some overlap 
between the Directive (Article 10) and the European Payment Order Procedure. 

EU Added Value  
There  is  a  general  consensus  among  industry  and  national  authorities  that  the 
Directive  generates  significant  added  value.  National  authorities  and  industry 
suggest that the impacts of the Directive would have been unlikely to be achieved 
by Member States individually.  

Despite  a  few  national  derogations,  the  added  value  lies  in  the  fact  that  -  to  the 
extent  possible  –  there  is  now  greater  uniformity  in  payment  terms  across  the 
Single Market.  

While the average payment duration in PA2B transactions still exceeds the limits set 
out by the Directive, EU added value lies in ensuring the problem of late payment is 
high  on  the  political  agenda,  sending  a  message  to  creditors  that  the  problem  is 
being addressed.  

Related to this, public authorities also highlighted the added value of the Directive 
in  monitoring  improvements  in  payment  duration.  A  common  measurement 
methodology would enhance this value added. Finally, though it does not solve the 
problem on its own, the Directive can provide an anchor point for the  introduction 
of  effective  accompanying  measures  at  national  or  sectoral  level  and  for  an 
exchange of good practices between Member States.  

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Evaluation of Late Payment Directive  

13. RECOMMENDATIONS  

Based on the above, the study team proposes the following set of recommendations 
for the European Commission.  

The study has identified a number of specific areas where there could be room for 
improvement  without  changing  the  fundamental  characteristics  of  the  current 
legislation.  We  differentiate  between  two  types  of  recommendations:  changes 
related directly to the Directive itself and accompanying measures. 

Recommendations related to the Directive itself 

1.  Clarifying certain aspects of the Directive. This includes in particular the 
following:    “grossly  unfair”  and  the  calculation  of  contractual  terms.  Across 
various  Member  States  stakeholders  found  that  the  definition  of  what 
constitutes  grossly  unfair  was  ambiguous  and  left  too  much  scope  for 
interpretation. Similarly, there is lack of clarity of the Directive on when the 
calculation  of  a  payment  term  starts.  There  are  different  practices  across 
different sectors and across the EU. In some instances, the payment term is 
calculated  from  the  issue  of  an  invoice,  whereas  in  other  cases  payment 
term start from the receipt of goods. These aspects could be clarified either 
in  a  revised  text  of  the  Directive  or  alternatively,  through  a  guidance 
document  published  by  the  European  Commission  explaining  how  these 
elements should be interpreted.  

2.  Assessment  of  the  implementation  of  Article  10  in  all  Member 
States.  The  Directive  states  that  that  MS  shall  ensure  that  an  enforceable 
title can be obtained within 90 calendar days of the lodging of the creditor’s 
action  or  application  to  a  court,  provided  that  the  debt  is  not  disputed. 
However, the procedures available to companies vary across Member States 
due to different requirements in i.e. eligible sums of claim, need for lawyer, 
and type of procedure (i.e. online).  

3.  Changes to the way the interest rate is claimed. At present, it is up to 
the  creditor  to  decide  whether  to  claim  interest  for  late  payment  and  this 
means that even businesses who are aware of the rights introduced by the 
Directive  often  do  not  exercise  these  rights,  due  to  the  fear  of  damaging 
business  relationships.  Automatic  interest  on  late  payment  would  remove 
the requirement for the creditor to take the initiative in exercising their right 
and provide an additional incentive for the debtor to pay promptly. 

4.  Increasing  the  minimum  40  EUR  compensation  fee.  The  EUR  40 
compensation  fee  is  seen  as  not  proportional  to  the  sums  owed  and  the 
costs implied by late payment.  The minimum fee should be higher to reflect 
the  effort  required  in  chasing  and  recovering  late  payment.  A  higher 
compensation  fee  could  encourage  businesses  to  claim  their  rights  in  the 
short term and contribute to changing payment culture in the long term.  

External aspects  

1.  Raising  awareness  of  the  impact  of  late  payment.  The  introduction  of 
the LPD, was accompanied by an EU-wide awareness campaign surrounding 
late payment rules. This study has shown that the main determinant of late 
payment  is  not  related  to  awareness  of  the  rules  but  to  country  specific 

71 

 
 
 
 
 
 
 
Ex-Post Evaluation of Late Payment Directive 

effects (e.g. business culture). Rather than focusing on rules and legislation, 
a future awareness campaign should focus on the impact of late payment on 
businesses,  with  the  aim  of  making  late  payment  a  “socially  unacceptable” 
practice in all MS.  

2.  Fostering  the  development  and  implementation  of  prompt  payment 
policies 
in  all  MS.  The  study  has  shown  that  prompt  payment 
policies/codes  in  the  public  and  private  sectors  are  an  effective  way  to 
shorten  payment  duration.  The  Commission  should  take  active  steps  to 
support  all  MS  in  developing  such  schemes  as  accompanying  measures  to 
the LPD. This would entail developing the “business case” for the creation of 
prompt payment policies, drawing on the experiences of countries that have 
implemented  such  schemes  (see  also  the  recommendation  below)  and 
engaging  with  sectoral  associations  and  MS  authorities  to  promote  the 
implementation of prompt payment schemes.  

3.  Facilitating  the  exchange  of  best  practices  though  peer  review 
workshops.    Since  the  Directive  has  introduced  the  possibility  for  MS  to 
introduce  voluntary  measures,  other  MS  would  welcome  more  information 
regarding  the  effectiveness  of  these  measures.  “Peer  review”  type 
workshops involving public authorities and experts from all EU MS could be 
organised  in  specific  MS  which  are  taking  (or  intend  to  take)  an  active 
approach to tackling late payment. In this way, policy officers from different 
departments  could  share  their  experiences  with  Member  States  lacking  a 
coordinated approach.  

4.  Providing  access  to  effective  remedies.  In  the  presence  of  lengthy 
juridical  procedures  an  effective  system  of  ADR  should  be  provided  at  the 
national level. Of importance is the European Small Claims Procedure which 
provides a fast and efficient way of recovering debt, but is not often used by 
companies. One of the reasons for this seems to be the relatively low sum.  

5.  Monitoring  progress  -  The  Directive  is  silent  regarding  how  to  measure 
late payment. Such harmonised measurement would facilitate the provision 
of  up  to  date  statistical  data  and  it  would  allow  cross-country  comparison 
over time. 

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Evaluation of Late Payment Directive  

14. ANNEX  1:  TRANSPOSITION  OF  LATE  PAYMENT  DIRECTIVE  IN  MEMBER 

STATES 

Country 

Summary 

Austria 

Belgium 

Bulgaria 

Croatia 

Cyprus 

Czech 
Republic 

In  Austria,  the  Late  Payment  Directive  was  transposed  through  the  Law  (BGBl.  I  Nr. 
50/2013 Art. 9), which entered into force on 21 March 2013. As a general rule, invoices 
should  be  paid  within  30  calendar  days  upon  receipt  of  the  invoice,  and  no  payment 
terms should exceed 60 days. For late payments, if the parties have not agreed upon an 
interest  rate,  this  shall  be  the  one  determined  by  the  ECB  for  the  relevant  semester 
increased by 9 percentage points. In addition, the creditor is entitled to demand a fixed 
amount for recovery costs of EUR 40. 
In Belgium, the Late Payment Directive was transposed through the Act of 22 November 
2013, which entered into force retroactively on 16 March 2013. Under Belgian law, if an 
agreement does not contain a payment date or term, each payment should be executed 
within 30 days. In B2B transactions companies are free to agree on a payment term of 
no more than 60 days, or on a longer period, provided this is not grossly unfair to the 
creditor.  The  interest  rate  for  late  payments  is  the  one  set  by  ECB  plus  8  percentage 
points. The minimum fixed sum for compensation is set at EUR 40.  

In  Bulgaria,  the  Late  Payment  Directive  was  transposed  though  the  Bulgarian 
Commercial  Law  Act,  which  entered  into  force  on  4  March  2013.  Under  Bulgarian  law, 
the  maximum  statutory  period  to  complete  a  payment  is  60  days  in  B2B  transactions. 
Exceptions  to  this  time  limit  can be expressly agreed  in  the contract  if  it is objectively 
justified  in  light  of  the  particular  nature  or  feature  of  the  goods/services;  and  it  is  not 
grossly  unfair  to  the  creditor  and  contrary  to  good  faith.  The  payment  terms  in  PA2B 
transactions are set at 30 days but can be extended to 60 days on the same grounds as 
mentioned before. For late payments, the interest rate is the one set by the Bulgarian 
Central Bank plus 10 percentage points and the creditor has the right to receive interest 
14  calendar  days  following  the  date  of  receipt  by  the  debtor  of  the  invoice  or  an 
equivalent request for payment. The minimum fixed compensation for recovery costs is 
80 BGN. 
Croatia transposed the Late Payment Directive before joining the EU in July 2013 - the 
Croatian Financial Operations and Pre-Bankruptcy Settlement Act "Zakon o financijskom 
poslovanju i predstečajnoj nagodbi", which entered into force on 1 October 2012. Under 
Croatian law, the payment term is 30 days in B2B transactions unless differently agreed 
by the parties in the contract and cannot exceed 60 days. Exceptionally, parties to the 
contract can agree on a longer payment terms under the condition that the agreement 
is made in writing, however, the payment terms cannot exceed 360 days in any case. In 
PA2B transactions, if not agreed in contract, the statutory period of 30 days is applied. 
Exceptionally,  parties  to  the  contract  can  agree  on  a  longer  payment  terms  under  the 
condition  that  the  agreement  is  made  in  writing,  however,  the  payment  period  cannot 
exceed  60  days  in  any  case.  The  interest  rate  is  the  one  set  by  the  Croatian  Central 
Bank  plus  8  percentage  points.  The  minimum  fixed  sum  for  compensation  costs  is  the 
equivalent of EUR 40 in Kuna. 
Cyprus  transposed  the  Late  Payment  Directive  into  its  national  laws  on  27  July  2012. 
For B2B and PA2B transactions, the law provides for a payment term of 30 days. Public 
entities  in  the  healthcare  sector  can  opt  for  a  deadline  of  up  to  60  days.  Between 
private  businesses  if  the  parties  agree  to  extend  the  due  date  for  payment  beyond  60 
days,  this will  only be valid  if the extension is not “grossly unfair” to the creditor.  The 
interest rate is the one set by the ECB increased by 8 percentage points. The minimum 
fixed sum for compensation costs is set at EUR 40. 
Czech  Republic  transposed  the  Late  Payment  Directive  into  national  legislation 
(paragraph  61),  specifically  into  Civil  Code  Act  No  89/2012.  Sb.  The  statutory  interest 
rate  for  late  payment  and  the  compensation  for  recovery  costs  are  regulated  in 
Government Decree No 351/2013 Sb, sections 2 and 3. Under Czech law the payment 
term is set at 30 days in B2B transactions. There is a possibility, in exceptional cases, to 
extend  payment  to  60  days.  In  PA2B  transactions,  the  payment  term  may  extend 
beyond the 30 days only when it may be justified by the nature of the obligation and in 
no  case  it  may  exceed  60  days.  This  rule  applies  also  for  subcontractors  involved  in 
public contracts. The interest rate is the one set by the Czech National Bank increased 
by  8  percentage  points.  The  minimum  compensation  cost  for  recovery  is  CZK  1,200 

73 

 
 
 
 
 
 
 
 
 
Ex-Post Evaluation of Late Payment Directive 

(equivalent to approximately EUR 40). 

In Denmark, the Late Payment Directive  was transposed though  amendment no. 1244 
of 18 December 2012  to  the Danish Interest  Act,  which  entered into force on 1 March 
2013. The maximum payment term in PA2B transactions is set at 30 days from the date 
on which the creditor has sent the invoice or made an equivalent request for payment 
and  can  be  extended  to  up  to  60  days  by  executive  order.  Also,  in  B2B  transactions 
payment term is set at 30 days but parties in the contract may  agree  on an extended 
period  provided  that  two  conditions  are  met:  i)  the  extended  payment  period  shall  be 
expressly  approved  by  the  creditor;  and  ii)  the  extended  payment  period  shall  not  be 
unfair  to  the  creditor.  The  interest  rate  is  the  one  set  by  the  Danish  National  Bank 
increased by 8 percentage points. The minimum compensation cost for recovery is DKK 
310. 
Estonia  transposed  the  Late  Payment  Directive  through  amendments  to  the  Law  of 
Obligations Act and its Code of Civil Procedure, which entered into force in April 2013. 
Under Estonian law, the maximum statutory payment term is 60 calendar days, but the 
time-limit  for  the  reception  and  examination  of  delivered  goods  or  services  must  not 
exceed  30  days.  Special  agreements  between  entrepreneurs  (for  example  longer 
payment  deadlines)  are  allowed,  if  these  are  written  down  explicitly,  i.e.  customary 
practice  between  entrepreneurs  must  be  in  accordance  with  law.  The  agreement  must 
not be exceedingly unfair to debtors and the principles of good faith and reasonableness 
must be followed. Public authorities cannot agree on a payment period of more than 30 
days,  unless  this  derives  from  the  nature  or  special  features  of  the  contract  (state 
departments whose economic activities have industrial or commercial nature or provide 
duly  recognized  healthcare  service).  The  interest  rate  is  the  one  set  by  the  ECB 
increased by 8 percentage points. The minimum fixed sum for recovery costs is EUR 40. 
In  Finland,  the  Late  Payment  Directive  was  transposed  with  a  new  Act  on  Payment 
Terms  in  Commercial  Relations  and  through  amendments  to  the  Collection  of 
Receivables and to the Interest Act, which entered into force on 16 March 2013. Under 
Finnish law, the payment term is 30 days in PA2B transactions. The Finnish Parliament 
has  recently  amended  the  Act  of  Payment  Terms  in  Commercial  Relations  so  that  the 
period  for  payment  fixed  in  the  contract  may  now  not  exceed  30  days  (down  from  60 
days), unless otherwise expressly stated in the contract. The interest rate is the one set 
by the ECB increased by 8 percentage points. The minimum fixed sum for compensation 
costs is set at EUR 40. 
France  transposed  the  Late  Payment  Directive  into  its  national  legislation  in  2012  with 
decree No. 2013-269 of 29 March 2013 on combatting late payments in public contracts 
covering  the  application  of  law  No.  2013-100  of  28th  January  2013  adapting  national 
law  to  the  provisions  of  the  2011  Directive,  and  in  particular,  extending  the  scope  of 
previous  national  regulation  to  all  public  sector  contracting  authorities.  Under  French 
law, if there is no contractual agreement, the maximum statutory period of payment is 
30  days  following  the  date  on  which  the  goods  were  received  or  the  services  were 
provided.  The  parties  in  the  contract  can  set  a  different  payment  period  of  up  to  45 
calendar  days  end  of  month  or  60  calendar  days  following  the  date  the  invoice  was 
issued. In PA2B transactions, the payment term is generally set at 30 calendar days (50 
for  public  health  bodies).  The  interest  rate  is  agreed  by  the  parties  and  the  minimum 
interest  rate  is  equivalent  to  three  times  the  legal  interest  rate.  If  there  is  no 
contractual  arrangement,  the  interest  rate  is  the  one  set  by  the  ECB  increased  by  10 
percentage points. The minimum fixed sum for compensation costs is set at EUR 40. 
The majority of German legislation was already compliant with major parts of the Late 
Payment Directive before its entry into force. Yet, the law transposing the Late Payment 
Directive  entered  into  force  in  July  2014.  Under  German  legislation,  where  there  was 
previously  no  maximum  statutory  period  to  execute  a  payment,  this  is  now  set  at  60 
calendar days, reduced to 30 days when a payment is to be made by a public authority. 
The payment term may be extended and exceed 60 days if agreed by the parties and if 
such  delay  is  not  grossly  unfair  to  the  interests  of  the  creditor.    A  public  debtor  may 
only  extend  the  period  of  payment  to  a  maximum  of  60  days,  even  if  the 
aforementioned conditions are met. If the parties in the contract have not agreed on an 
interest  rate,  this  shall  be  the  basic  rate  increased  by  9  percentage  points.  The 
minimum fixed sum for compensation costs is set at EUR 40. 
In  Greece,  the  Late  Payment  Directive  was  transposed  with  Law  4152/2013  of  9  May 
2013, which entered into force with a retroactive effect on 16 March 2013. Under Greek 
law,  the  period  for  payment  fixed  in  any  contract  may  not  exceed  60  calendar  days, 
unless  otherwise  expressly  contractually  agreed,  and  provided  that  this  would  not  be 
grossly  unfair  to  the  creditor.  In  PA2B  transactions  a  statutory  period  for  payments  is 
set at 60 calendar days. If there is no contractual arrangement, the interest rate is the 
one  set  by  the  ECB  increased  by  8  percentage  points.  The  minimum  fixed  sum  for 
compensation costs is set at EUR 40. 
In  Hungary  amendments  to  the  Hungarian  Civil  Code  transposed  the  Late  Payment 
Directive. In commercial transactions, as a general rule, the maximum payment period 
shall be 30 calendar days (unless it is provided in the contract otherwise); parties may 
agree on a payment period of longer than 30 days but, as a general rule, such a period 

Denmark 

Estonia 

Finland 

France 

Germany 

Greece 

Hungary 

74 

 
 
Evaluation of Late Payment Directive  

Ireland 

Italy 

Latvia 

Lithuania 

Luxembourg 

Malta 

Netherlands 

cannot  exceed  60  days.  Unless  proven  otherwise,  contractual  provisions  stipulating  a 
payment period of longer than 60 days shall be considered as unfair conditions. If there 
is no contractual arrangement, the interest rate for late payments is the one set by the 
Hungarian  National  Bank  increased  by  10  percentage  points.  The  minimum  fixed 
compensation for recovery costs is the equivalent of EUR 40 in Hungarian currency.  
Ireland  transposed  the  Late  Payment  Directive  with  the  Late  Payments  in  Commercial 
Transactions  Regulations  2012.  The  Irish  law  provides  that  in  B2B  transactions  the 
general deadline is 30 days unless otherwise stated in the contract. It is possible, if both 
parties  agree  to  extend  payment  terms  up  to  60  days.  The  period  may  be  extended 
beyond  60  days  only  if  “expressly  agreed”  by  the  parties  in  the  contract  and  provided 
that it is not grossly unfair to the supplier. The standard deadline for public authorities 
to business payments  is 30 days. Payment can be extended up to 60 days only if  it  is 
“expressly agreed” and justified in light of the nature or feature of the contract. If there 
is no contractual arrangement, the interest rate is the one set by the ECB increased by 
8 percentage points. The minimum fixed sum for compensation costs is set at EUR 40. 
The Late Payment Directive was transposed in Italy by the Legislative Decree n. 192 of 
9 November 2012. Under Italian law, the maximum statutory payment term is 30 days. 
In  case  of  B2B  transactions,  the  term  can  be  derogated  by  the  parties  and  shall  be 
expressly agreed upon if it exceeds 60 days. Regarding transactions with certain types 
of  public  enterprises  and  with  local  health  authorities,  a  60-day  term  applies.  If  the 
parties  in  the  contract  have  not  agreed  upon  an  interest  rate,  this  shall  be  the  ECB’s 
reference  rate  of  the  relevant  semester  increased  by  8  percentage  points.  The  parties 
can  agree  on  a  different  interest  rate,  provided  it  is  not  grossly  unfair.  The  minimum 
fixed sum for compensation costs is set at EUR 40. 
Amendments  to  the  Latvian  Civil  Law,  entered  into  force  on  1  July  2013,  which 
transposed the Late Payment Directive. A limit is applied to the payment term and may 
not exceed 30 days. The payment term can be extended up to 60 days only if this can 
be  justified  by  taking  into  account  the  obligation  to  be  performed.  The  interest  rate  is 
the one set by the ECB  increased by 8 percentage points. The minimum fixed sum for 
compensation costs is set at EUR 40. 
The  Late  Payments  Directive  was  transposed  into  Lithuanian  national  law  through  the 
Law  on  Prevention  of  Late  Payments  in  Commercial  Transactions  and  through  the  Law 
on  Payment  for  Agriculture  Products  (Art.  5,  6,  7,  11,  12,  and  13).  Under  Lithuanian 
law,  the  maximum  payment  period  is  set  at  60  calendar  days  in  B2B  transactions 
(unless  otherwise  provided  by  the  Law)  and  30  days  in  PA2B  transactions.  Deviations 
from this rule are allowed in cases established by the Law. The interest rate is the one 
determined  by  the  ECB  increased  by  8  percentage  points.  The  minimum  fixed  sum  for 
compensation costs is set at EUR 40. 
In Luxembourg, the Late Payment Directive was transposed by Law of 29 March 2013. 
The  maximum  duration  of  payment  periods,  which  as  a  general  rule  can  no  longer 
exceed 60 days. However, the contracting parties may depart from this rule by explicitly 
defining longer payment periods in their agreement. Nevertheless, the extension of this 
deadline  must  not  be  grossly  unfair  to  the  creditor.  In  PA2B  transaction  30  days 
payment  deadline  is  set,  unless  stipulated  otherwise  by  contract.  A  longer  payment 
period, with a maximum of 60 days, must be duly justified by the specific nature of the 
contract  or  by  specific  elements  in  the  contract.  If  the  parties  have  not  agreed  on  an 
interest rate,  this shall be  the ECB’s reference rate of the relevant semester increased 
by 8 percentage points. Where interest for late payment becomes payable, the creditor 
is entitled to a minimum compensation sum of EUR 40.  
The Late Payments Directive was transposed into the Maltese law through Legal Notice 
272 published on 14 August 2012. The transposition forms part of the Commercial Code 
(Chapter 13 of the Laws of Malta). Further legal amendments were carried out following 
initial  transposition  and  full  transposition  was  completed  through  Legal  Notice  13 
published  on  17th  January  2014.  This  transposition  also  forms  part  of  the  Commercial 
Code (Chapter 13 of the Laws of Malta). Under Maltese law, the payment term is set at 
30 days. If a different payment term is agreed in the contract, this shall not exceed 60 
days. Public authorities providing health care have an extension of the payment term to 
60  days.  If  the  parties  have  not  agreed  on  an  interest  rate,  this  shall  be  the  one 
determined  by  the  ECB’s  for  the  relevant  semester,  increased  by  8  percentage  points. 
The creditor is also entitled to a minimum of EUR 40 as compensation for the creditor’s 
own recovery costs.  
In  the  Netherlands,  the  Late  Payment  Directive  was  into  national  law  on  public 
procurement  in  2014.  Under  Dutch  law,  the  maximum  statutory  period  to  execute  a 
payment  in  B2B  transactions  is  30  days,  if  a  different  payment  term  is  not  agreed 
between the parties in the contract. The parties can agree upon a longer period of up to 
60  days  and  on  a  period  exceeding  60  days  provided  it  is  not  grossly  unfair  to  the 

75 

 
 
 
 
 
 
 
Poland 

Portugal 

Romania 

Slovenia 

Slovakia 

Spain 

Sweden 

Ex-Post Evaluation of Late Payment Directive 

creditor. The payment term  in PA2B transactions is set at 30 days. If the parties have 
not  agreed  on  an  interest  rate,  this  shall  be  the  one  determined  by  the  ECB’s  for  the 
relevant semester, increased by 8 percentage points. The creditor is entitled to demand 
a fixed amount for recovery costs set at EUR 40.  
In Poland, the Act on Payment Dates in Commercial Transactions, which transposed the 
Late  Payment  Directive,  entered  into  force  on  28  April  2013.  Under  Polish  law,  the 
maximum  statutory  period  to  execute  a  payment  in  B2B  transactions  is  60  days  as  of 
the date of receipt of the invoice or receipt confirming the delivery of goods or provision 
of  services.  The  parties  can  agree  otherwise  provided  this  is  not  grossly  unfair  to  the 
creditor.  In  case  it  is  a  public  entity,  the  maximum  payment  term  cannot  exceed  30 
days,  unless  a  longer  period  would  be  objectively  justified  by  the  particular  nature  or 
specific features of the contract. As a rule 60 days for healthcare sector was set. If the 
parties  have  not  agreed  on  an  interest  rate,  this  shall  be  the  Polish  National  Bank 
reference  rate  of  the  relevant  semester  increased  by  8  percentage  points.  Where 
interest  for  late  payments  becomes  payable,  the  creditor  is  entitled  to  a  minimum 
compensation  sum  of  the  equivalent  of  EUR  40  in  the  Polish  currency.  Interest  and 
compensation are calculated solely on the basis of overdue amounts. 
In  Portugal,  Decree  Law  62/2013  of  10  May  2013  transposed  the  Late  Payment 
Directive. Under Portuguese law, the payment term in B2B should not exceed 60 days, 
without prejudice to the parties being free to set a longer period. In PA2B transactions 
payment periods should not exceed 30 days, although longer periods may be agreed by 
the parties provided it is objectively justified in light of the particular nature or features 
of the contract. PAs in healthcare sector payment periods should not exceed 60 days. If 
the parties have not agreed on an interest rate for late payments, this shall be the one 
determined  by  the  ECB’s  for  the  relevant  semester  increased  by  8  percentage  points. 
The creditor is entitled to demand a fixed amount for recovery costs set at EUR 40. 
In Romania, Law 72/2013 entered into force on 2 April 2013 which transposed the Late 
Payment Directive. Under Romanian law, the maximum statutory payment term in the 
private  sector  is  30  days.  A  longer  payment  term  can  be  agreed  provided  it  is  not 
grossly unfair to the creditor. For public authorities, the payment term is set at 30 days 
Exceptionally, the parties may agree to increase the payment term to 60 calendar days, 
if  the  clause  is  not  manifestly  unfair  to  the  creditor  and  if  such  an  increase  is  justified 
given  the  subject  matter  of  the  contract.  Payment  term  in  PA2B  transactions  in  the 
healthcare is set at 60 days. If the parties have not agreed on an interest rate for late 
payments,  this  shall  be  the  one  determined  by  the  Romanian  National  Bank  for  the 
relevant semester increased by 9 percentage points. The creditor is entitled to demand 
a fixed amount for recovery costs set at the equivalent of EUR 40 in LEI. 
In  Slovenia,  the  Act  on  Prevention  of  Late  Payment  is  in  force  since  July  2012.  Under 
Slovenian  law,  the  maximum  statutory  payment  term  is  60  days.  A  longer  payment 
term  can  be  agreed  but  it  shall  not  exceed  120  days.    When  the  debtor  is  a  public 
authority,  the  payment  term  shall  not  exceed  30  days.  The  interest  rate  for  late 
payments  is  the  one  set  by  the  ECB  increased  by  8  percentage  points.  The  minimum 
fixed sum for compensation costs is set at EUR 40. 
In  Slovakia  the  Late  Payment  Directive  was  transposed  through  amendments  to  the 
Commercial  Code.  In  B2B  transactions  enterprises  should  pay  invoices  within  60  days 
unless  they  expressly  agree  otherwise  and  it  is  not  “grossly  unfair”  to  the  creditor. 
Public  authorities  must  pay  for  goods  and  services  within  30  days  or,  under  very 
exceptional circumstances, within 60 days. Slovakia provides for a dual system for late 
payment interest rates, a fixed one and a variable one. In the case of a fixed rate, the 
debtor will have to pay late payment interest equal to the base interest rate of the ECB, 
increased by 9 points percentage. In the case of a variable rate, the debtor will have to 
pay late payment interest equal to the ECB base rate, increased by 8 points percentage. 
If the creditor has not explicitly requested any of the two rates of late payment interest, 
the fixed rate takes precedence. The minimum fixed sum for compensation costs is set 
at EUR 40. 
In  Spain,  the  Royal  Decree-Law  4/2013  of  22  February  2013  transposed  the  Late 
Payment  Directive.  Under  Spanish  law,  where  the  parties  have  not  agreed  a  payment 
period, this is set at 30 days after the receipt of goods or services, even if the invoice 
has  been  previously  received.    Where  the  parties  have  agreed  to  a  different  payment 
period, this cannot exceed 60 calendar days. For the public sector, the payment term is 
set at 30 days. If the parties have not agreed on an interest rate, this shall be the ECB’s 
reference  rate  of  the  relevant  semester  increased  by  8  percentage  points.  A  different 
interest rate shall not be abusive to the supplier. The recovery costs are set at EUR 40 
and charged by the creditor in addition to any interest rate on late payment. 
In  Sweden,  the  Late  Payment  Directive  was  transposed  through  amendments  to  four 
existing laws: 1975:635; 1981:739; 1984:292, and 1990:746. Under Swedish law, the 
maximum  payment  term  in  B2B  and  PA2B  transactions  is  set  at  30  days.  Parties  may 
agree  on  a  longer  payment  term  provided  that  the  creditor  agrees  by  an  explicit 
approval  or  the  parties  have  agreed  to  a  payment  plan,  in  which  the  debt  is  paid  by 
instalments in a fixed plan. This arrangement applies to all PAs, not only in the health 
sector.  If  the  parties  have  not  agreed  on  an  interest  rate,  this  shall  be  the  Swedish 
Riksbank’s  reference  rate  of  the  relevant  semester  increased  by  8  percentage  points. 

76 

 
 
Evaluation of Late Payment Directive  

United 
Kingdom  

The  recovery  costs  are  set  at  SEK  450  and  charged  by  the  creditor  in  addition  to  any 
interest rate on late payments.  
The Late Payment Directive was transposed under English law by the Late Payment on 
Commercial  Debts  Regulations  2013  (SI  2013/395)  and  the  Late  Payment  of 
Commercial  Debts  (n.  2)  Regulations  2013  (SI  2013/908),  which  amend  the  Late 
Payment  Act  of  1998.    It  applies  to  commercial  contracts  made  on  or  after  16  March 
2013.  When  there  is  no  agreement  between  the  parties  in  the  contract,  the  payment 
term  is  set  at  30  days  after  i)  receipt  of  the  supplier’s  invoice;  ii)  receipt  of  goods  or 
services  from  the  supplier;  and  iii)  the  day  following  the  acceptance  or  verification  of 
the  goods  or  services,  where  such  a  procedure  is  provided  for  by  statute  or  the 
contract. A longer period of up to 60 days can be agreed between the parties, but if it is 
longer than 60 days it must be fair to both businesses. In PA2B transactions a limit of 
30 days was set, however, verification or acceptance of goods and services should not 
exceed, as a general rule, 30 days. Nevertheless, it should be possible for a verification 
procedure to exceed 30 days where agreed by both parties and not grossly unfair to the 
supplier.  Where  a  public  authority  purchases  goods  or  services,  interests  start  to  run 
after 60 days. If the parties have not agreed on an interest rate, this shall be the Bank 
of England reference rate of the relevant semester increased by 8 percentage points. In 
the UK, the minimum compensation sum for recovery costs depends on the size of the 
debt.  It  is  set  at  £40  for  debts  below  £1,000,  £70  for  debts  between  £1,000  and 
£10,000 and £100 for debts above £10,000. 

77 

 
 
 
 
 
 
 
Ex-Post Evaluation of Late Payment Directive 

15. ANNEX 2: DATA COLLECTION AND ANALYSIS 

15.1.  Data collection  

15.1.1.  Survey  

Construction of the sample  

The survey was based on an appropriate random sample of companies from all EU-
28  MS.  The  necessity  of  random  sampling  has  been  well  documented  in  the 
relevant  scientific  literature.  In  short,  the  main  reason  for  choosing  random 
samples  is  that  only  they  can  “equip”  the  resulting  estimators  with  the  desired 
properties like unbiasedness, and normality, which justify their use to ascertain the 
population  values.  When  convenience  sampling  is  used  or  –  even  worse  –  self-
selection of the respondents, the resulting estimators have very poor quality. If, for 
example, a mass mailing of the study questionnaire to all companies is used, then 
the  respondents  do  not  constitute  a  random  sample,  but  a  self-selected  sub-
sample.  It  could  be  possible  that  the  companies  which  face  the  problem 
investigated by the study (i.e. payment delays by clients) are much more likely to 
answer than the ones which do not face this problem. This would result in serious 
bias  of  the  estimator  and  the  potentially  larger  sample  will  only  result  in  greater 
bias.  On  the  other  hand,  if  a  random  selection  was  used,  then  the  potential  non-
response of the companies selected in the sample can be ameliorated though non-
response analysis techniques, which are fully valid in random samples. 

The sample size required is a function of the desired accuracy of the estimators of 
the study parameters and the sampling method used. Thus, in order to derive the 
sample  size  a  main  study  parameter  and  an  appropriate  plan  was  chosen.  It  was 
proposed to choose the proportion of companies reporting payment delays in 
the population, as the main study parameter, and stratified random sampling as 
the sampling plan. As strata two variables were used:  

 
 

the country (28 levels: EU-28 member states); and 
the company size (4 levels: very small, small, medium, large).  

This resulted in 28X4=112 strata. The advantages of the latter include the ability to 
derive separate estimates within sub-populations, and the potential reduction in the 
variance of the estimators, which in turn leads to greater accuracy. 

The relation of accuracy to sample size has the form:         ⁄   √ (   )
the accuracy of the estimator, p the (unknown) population proportion, n the sample 
size  and      ⁄   is  the  normal  distribution  percentile  (equal  to  1.96  when  α=0.05). 
Solving equation (1) for n for various values of E and p we derive a picture of the 
relation, which can be used to select the appropriate sample size for the study. This 
picture is presented in the figure below. 

 (1), where E is 

78 

 
 
 
 
 
 
Evaluation of Late Payment Directive  

Figure A2.1: Sample size (n) as a function of the estimated percent (p) at 
four maximum error levels (E). 

)
n
(
e
z
i
s
e
p
m
a
s

l

2500

2250

2000

1750

1500

1250

1000

750

500

250

0

2401 

1537 

1291 

1291 

601 

385 

267 

0,00

0,10

0,20

0,30

0,40

0,50

0,60

0,70

0,80

0,90

1,00

estimated percent 

E=0.02

E=0.025

E=0.040

E=0.05

E=0.6

As it can be seen from the figure, a sample size of 2400 companies will result in an 
accuracy  of  ±2%,  when  the  estimated  percent  is  50%  (i.e.  a  95%  confidence 
interval  [48%,  52%]).  For  smaller  estimated  percent,  the  accuracy  will  be  grater 
(as it can be seen using equation 1).  

For example, if the estimated percent is 25% or 75%, then the accuracy is ±1.7%, 
while  for  10%  or  90%  it  is  ±1.2%.  The  previous  statements  apply  when  the 
sampling plan is simple random sampling (SRS). When it is desired to produce valid 
estimators within subpopulations, the method of stratified random sampling (StRS) 
is used. If that is the case, the previous statements apply within the strata, but the 
overall calculations are different. When the allocation of the sample to the strata is 
proportional, equation (1) becomes:         ⁄   √∑     (    )
stratum weight (with    the size of the stratum in the population and N the size of 
the  population),  and     is  the  (unknown)  true  percent  in  stratum  h.  If  the 
proportions within the strata are all the same, equation (2) reduces to equation (1). 
If the allocation is not proportional the formulae become more complicated, but still 
manageable. 

 (2), where     

 is the 

The StRS procedure has clear ramifications of the analysis method. The formulas to 
estimate  aggregate  means  and  proportions  are  different,  thus  straight  forward 
application  of  analysis  tools  of  statistical  analysis  software  should  be  used  with 
extreme  caution.  Good  alternatives  are  the  SURVEYMEANS  and  SURVEYREG 
procedures of SAS™ statistical software which take into consideration the sampling 
methods.  To  give  an  example  of  the  potential  problems,  an  unbiased  estimator  of 
the  mean  in  StRS  is  ̅   ∑    ̅ 
,  (where  Wh  the  stratum  h  weight,  and   ̅  the 

79 

 
 
 
 
 
 
 
 
 
 
   
 
  
 
 
   
 
 
 
Ex-Post Evaluation of Late Payment Directive 

within stratum h sample mean), with estimated variance:   ̅
 where   
the  within  stratum  h  sample  variance.  The  corresponding  formulae  for  SRS  are 
different  ( ̅   ∑   
variance),  thus  the  calculations  involved  in  summary  statistics  presentation  and 
hypothesis testing lead to different results. 

,  respectively  for  the  sample  mean  and 

    ∑ (    ̅) 

  and   ̅

    ∑   

Given the low response rate expected, the issue of non-response analysis should be 
raised.  Since  the  non-response  rate  exceeds  30%,  then  some  adjustments  could 
have been made in order to preserve the validity of the estimation and analysis. It 
should  be  noted  that  non-response  is  expected  to  be  “informative”  meaning  that 
non-responders are different from the responders.  

One  could  easily  assume  that  companies  facing  payment  problems  from  the 
customers,  are  more  likely  to  respond  than  companies  which  do  not  face  such 
problems.  In  order  to  resolve  this  problem,  a  non-response  analysis  could  have 
been  carried  out  which  would  involve  selecting  a  smaller  sample  (500  to  700 
companies)  from  the  non-response  set,  and  aggressively  pursuing  response  on  a 
drastically reduced version of the study questionnaire containing no more than five 
questions  using  direct  contact  methods  (telephone  interviews).  Once  the  data  is 
collected, it can be used to adjust the full sample estimates. 

A final note on the source of the data and the (potential) problems it confers upon 
the study. Sampling procedures like SRS and StRS are based on some type of a list 
of the population members, in the present case companies based in EU-28 member 
states. Such a catalogue is not available. The best proxy available is the AMADEUS 
database. Technically speaking, the results of a study sampling from AMADEUS, is 
applicable only to the “population” of the companies included in the database. Yet, 
we  can  (or  should)  assume  that  the  companies  included  in  AMADEUS,  are  not 
different from the rest of the companies in EU-28. Given that the sampling methods 
is StRS and the stratum sizes are taken from EUROSTAT (thus are representative of 
the total population), we feel that the proposed method is the best – in the present 
circumstances. 

The two sub-samples 

In our offer, we proposed the sample to be divided in two strata using as a criterion 
the  percentage  of  companies  facing  late  payments.  The  proxy99we  used  for  the 
allocation of the countries into two strata was the GDP trend, under the hypothesis 
that companies in countries with negative or stagnated GDP growth tend to suffer 
more by late payments than in countries with relatively high growth. 

The  rationale  behind  the  grouping  was  to  increase  further  the  accuracy  of  the 
survey from 2.5% to around 1.9% by selecting groups of countries that depart from 
the initial assumption of 50%100 within each of these groups. If we assume that the 
proportion of companies reporting payment delays drops from 50% towards 30% in 
one group and increases to 70% in the other group then setting the accuracy level 
to 2.5% within each group, the per group sample size is 1300 companies and the 
overall is 2600, leading to overall accuracy of 1.92%. 

In line with the discussion at the kick-off meeting, we have elaborated further the 
criteria  for  grouping  the  countries  using  actual  data  on  late  payments  (Intrum 
Justitia, 2014). Therefore, in addition to our initial scenario, we suggest a grouping 

99 Proxy variable is a variable that is not in itself directly relevant, but that serves in place of an 

unobservable or immeasurable variable. 

100 The assumption for the development of the sample is that the main variable of the survey has a value 

close to 50% (e.g. share of companies with facing late payment problems).   

80 

 
 
   
  
 
  
 
   
  
 
 
   
   
 
   
 
 
                                                 
Evaluation of Late Payment Directive  

based  on  the  deviation  of  the average  payment  duration  in  a  country  from 
the  Directive’s  target  of  30  days  for  transactions  with  public  authorities 
and 60 days for the B2B transactions.      

The  figure  below  present  the  average  payment  term  (contract)  and  the  average 
delay in days for each MS in B2B and PA2B transactions. 

Figure  A.2.2:  Average  payment  term  (contract)  and  the  average  delay  in 
days for the transactions with other businesses 

Source: Intrum Justitia, EPI 2014 

81 

65 60 60 50 35 30 30 40 30 30 30 25 25 25 25 20 20 20 15 28 25 20 23 25 20 20 31 30 25 35 43 30 30 15 20 17 14 19 18 17 16 20 18 18 22 7 10 15 12 9 13 6 0 10 20 30 40 50 60 70 80 90 100 110 Italy  Cyprus Spain  Portugal  Greece Ireland  Slovenia  France  Croatia Lithuania  Czech Republic n  Slovakia Hungary  Netherlands  UK  Poland  Belgium  Bulgaria Latvia  Sweden  Denmark  Estonia  Austria  Germany  Romania  Finland  Contract Delay  
 
 
 
 
 
 
 
 
 
 
 
Ex-Post Evaluation of Late Payment Directive 

Figure  A2.3:  Average  payment  term  (contract)  and  the  average  delay  in 
days for the transactions with public authorities 

Source: Intrum Justitia , EPI 2014 

The figure below presents the deviation of the average payment duration in the MS 
from  Directive’s  requirement.  The  Y-axis  corresponds  to  the  average  number  of 
days for payment for companies in each MS below or above the requirement of the 
Directive  for  the  B2B  transactions  (60  days).  The  X-axis  is  the  same  for  the 
transactions with public authorities. The size of the bubbles corresponds to the sum 
of days of delay for all transactions. The Figure enables to see how far the reality is 
for the companies compared to the requirements of the LPD. 

82 

80 50 80 60 60 40 30 30 30 30 30 30 30 30 25 30 25 29 25 20 20 25 25 28 15 20 90 109 75 73 25 20 30 27 25 22 22 21 19 15 20 15 18 13 16 18 17 11 10 6 10 4 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 Italy  Greece Spain  Portugal  Cyprus France  Croatia Slovakia Hungary  Belgium  Bulgaria Lithuania  Slovenia  Czech Republic n  Romania  Ireland  Netherlands  Austria  UK  Poland  Latvia  Germany  Denmark  Sweden  Estonia  Finland  Contract Delay  
 
 
 
Evaluation of Late Payment Directive  

Figure A.2.4: Average number of days of payment above or below the Directive’s requirement 

Source: Intrum Justitia (2014), Late Payment Index 2014. Calculations Technopolis Group-VVA-E&Y

83 

Austria(cid:9)(cid:9)Belgium(cid:9)(cid:9)Bulgaria(cid:9)Croaa(cid:9)Cyprus(cid:9)Czech(cid:9)Republic(cid:9)(cid:9)Denmark(cid:9)(cid:9)Estonia(cid:9)(cid:9)Finland(cid:9)(cid:9)France(cid:9)(cid:9)Germany(cid:9)(cid:9)Greece(cid:9)Hungary(cid:9)(cid:9)Ireland(cid:9)(cid:9)Italy(cid:9)(cid:9)Latvia(cid:9)(cid:9)Lithuania(cid:9)(cid:9)Netherlands(cid:9)(cid:9)Poland(cid:9)(cid:9)Portugal(cid:9)(cid:9)Romania(cid:9)(cid:9)Slovakia(cid:9)Slovenia(cid:9)(cid:9)Spain(cid:9)(cid:9)Sweden(cid:9)(cid:9)UK(cid:9)(cid:9)-20 0 20 40 60 80 100 120 140 -40 -20 0 20 40 average(cid:9)payment(cid:9)term(cid:9)for(cid:9)B2B(cid:9)transacons(cid:9)-(cid:9)60(cid:9)average(cid:9)payment(cid:9)term(cid:9)for(cid:9)transacon(cid:9)with(cid:9)public(cid:9)authories(cid:9)-(cid:9)30(cid:9) 
 
 
 
 
 
 
 
Several countries are very unfavourable for creditors: Italy, Spain, Portugal, Cyprus 
and Greece. These countries weight 35% of the total of enterprises in the EU (see 
table  below).  Other  countries  are not very  favourable  to  creditors to what  regards 
transactions  with  public  authorities:  France,  Croatia  and  Slovenia.  These  three 
countries represent 14% of the total enterprises in the EU. 

Italy, Greece, Spain, Portugal, Cyprus, France, Croatia and Romania  

The two samples were as follows: 
 
  Luxembourg,  Lithuania,  Austria,  Latvia,  UK,  Ireland,  Germany,  Bulgaria, 
Estonia,  Croatia,  Denmark,  The  Netherlands,  Finland,  France,  Belgium, 
Hungary, Sweden, Poland, Malta, Czech Republic, Slovakia and Slovenia.  

Please note that data are not available for Malta and for Luxembourg. We propose 
to put these two countries in the second group. 

Figure A.2.5: Share of MS in the total of EU enterprises 

Country 

Austria 

Belgium 

Bulgaria 

Croatia (2012) 

Cyprus 

Czech Republic 

Denmark 

Estonia 

Finland 

France 

Germany 

Greece (*) 

Hungary 

Ireland 

Italy 

Latvia 

Lithuania 

Luxembourg 

Malta 

Poland 

Portugal 

Romania 

Slovakia 

Slovenia 

spain 

Sweden 

The Netherlands 

% of enterprises in the EU total 

1% 

2% 

1% 

1% 

0% 

4% 

1% 

0% 

1% 

12% 

11% 

3% 

2% 

1% 

16% 

0% 

0% 

0% 

0% 

8% 

3% 

2% 

2% 

0% 

12% 

3% 

4% 

UK 
source: EUROSTAT.  
(*) SBA Fact Sheet 2012, Greece Estimates for 2011, based on 2005-2009 figures from the Structural 
Business Statistics Database (Eurostat). Estimates have been produced by Cambridge Econometrics. 

8% 

84 

 
 
 
 
 
Evaluation of Late Payment Directive 

Figure A.2.6: Weights applied for the analysis 

Country 

Croatia 

Croatia 

Croatia 

Croatia 

Cyprus 

Cyprus 

Cyprus 

Cyprus 

France 

France 

France 

France 

Greece 

Greece 

Greece 

Greece 

Italy 

Italy 

Italy 

Italy 

Portugal 

Portugal 

Portugal 

Portugal 

Romania 

Romania 

Romania 

Romania 

Spain 

Spain 

Spain 

Spain 

Austria 

Austria 

Austria 

Austria 

Belgium 

Belgium 

Belgium 

Belgium 

Bulgaria 

Bulgaria 

Bulgaria 

Bulgaria 

size 

group 

Overall weight 

Group weight 

1 

2 

3 

4 

1 

2 

3 

4 

1 

2 

3 

4 

1 

2 

3 

4 

1 

2 

3 

4 

1 

2 

3 

4 

1 

2 

3 

4 

1 

2 

3 

4 

1 

2 

3 

4 

1 

2 

3 

4 

1 

2 

3 

4 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

1 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

0,006559108 

0,000482094 

0,000087516 

0,000019102 

0,001947836 

0,000133868 

0,000024536 

0,000004674 

0,109698452 

0,005639183 

0,000930424 

0,000200934 

0,032091903 

0,002205568 

0,000404250 

0,000077000 

0,162306379 

0,011154770 

0,002044514 

0,000389433 

0,036106291 

0,001611808 

0,000235683 

0,000035865 

0,017214027 

0,001938217 

0,000364290 

0,000070600 

0,100271628 

0,005454302 

0,000702603 

0,000128179 

0,012194890 

0,001501692 

0,000229204 

0,000047097 

0,023796883 

0,001265290 

0,000193385 

0,000040083 

0,012999916 

0,001044552 

0,000194722 

0,000031105 

0,013104194 

0,000963157 

0,000174845 

0,000038162 

0,003891507 

0,000267450 

0,000049020 

0,000009337 

0,219162383 

0,011266309 

0,001858858 

0,000401438 

0,064115198 

0,004406421 

0,000807636 

0,000153836 

0,324265771 

0,022285694 

0,004084658 

0,000778034 

0,072135392 

0,003220171 

0,000470863 

0,000071654 

0,034391254 

0,003872290 

0,000727802 

0,000141048 

0,200328889 

0,010896943 

0,001403703 

0,000256085 

0,024415908 

0,003006600 

0,000458899 

0,000094295 

0,047644748 

0,002533291 

0,000387184 

0,000080251 

0,026027684 

0,002091342 

0,000389861 

0,000062277 

85 

 
 
 
 
 
 
 
 
Czech Republic 

Czech Republic 

Czech Republic 

Czech Republic 

Denmark 

Denmark 

Denmark 

Denmark 

Estonia 

Estonia 

Estonia 

Estonia 

Finland 

Finland 

Finland 

Finland 

Germany 

Germany 

Germany 

Germany 

Hungary 

Hungary 

Hungary 

Hungary 

Ireland 

Ireland 

Ireland 

Ireland 

Latvia 

Latvia 

Latvia 

Latvia 

Lithuania 

Lithuania 

Lithuania 

Lithuania 

Luxembourg 

Luxembourg 

Luxembourg 

Luxembourg 

Malta 

Malta 

Malta 

Malta 

Netherlands 

Netherlands 

Netherlands 

Netherlands 

Poland 

Poland 

Poland 

Poland 

1 

2 

3 

4 

1 

2 

3 

4 

1 

2 

3 

4 

1 

2 

3 

4 

1 

2 

3 

4 

1 

2 

3 

4 

1 

2 

3 

4 

1 

2 

3 

4 

1 

2 

3 

4 

1 

2 

3 

4 

1 

2 

3 

4 

1 

2 

3 

4 

1 

2 

3 

4 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

0,043531481 

0,001516308 

0,000304999 

0,000063723 

0,008933507 

0,000613970 

0,000112532 

0,000021435 

0,002259276 

0,000218446 

0,000045080 

0,000006571 

0,009515715 

0,000706477 

0,000117246 

0,000027827 

0,090345427 

0,006209137 

0,001138049 

0,000216772 

0,023631386 

0,001109681 

0,000186401 

0,000036675 

0,005990003 

0,000435319 

0,000079788 

0,000015198 

0,003514870 

0,000336379 

0,000063952 

0,000008412 

0,005276061 

0,000481376 

0,000096058 

0,000013310 

0,001156380 

0,000136233 

0,000027048 

0,000006372 

0,001198755 

0,000060483 

0,000012836 

0,000002277 

0,033917041 

0,001884205 

0,000385409 

0,000069912 

0,065866541 

0,002417896 

0,000699822 

0,000139381 

0,087156225 

0,003035865 

0,000610652 

0,000127582 

0,017886154 

0,001229255 

0,000225305 

0,000042915 

0,004523393 

0,000437360 

0,000090256 

0,000013156 

0,019051817 

0,001414467 

0,000234742 

0,000055714 

0,180884413 

0,012431576 

0,002278535 

0,000434009 

0,047313401 

0,002221739 

0,000373201 

0,000073429 

0,011992838 

0,000871571 

0,000159747 

0,000030428 

0,007037271 

0,000673479 

0,000128041 

0,000016843 

0,010563426 

0,000963783 

0,000192322 

0,000026649 

0,002315238 

0,000272757 

0,000054154 

0,000012758 

0,002400079 

0,000121096 

0,000025700 

0,000004559 

0,067906747 

0,003772447 

0,000771644 

0,000139974 

0,131874197 

0,004840972 

0,001401142 

0,000279060 

86 

 
 
Evaluation of Late Payment Directive 

Slovakia 

Slovakia 

Slovakia 

Slovakia 

Slovenia 

Slovenia 

Slovenia 

Slovenia 

Sweden 

Sweden 

Sweden 

Sweden 

United Kingdom 

United Kingdom 

United Kingdom 

1 

2 

3 

4 

1 

2 

3 

4 

1 

2 

3 

4 

1 

2 

3 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

2 

0,017896077 

0,000610671 

0,000103454 

0,000023503 

0,005056744 

0,000263709 

0,000053790 

0,000010391 

0,027977612 

0,001337189 

0,000229173 

0,000045584 

0,068866974 

0,006841735 

0,001181732 

0,035830495 

0,001222649 

0,000207130 

0,000047056 

0,010124322 

0,000527983 

0,000107695 

0,000020805 

0,056015164 

0,002677242 

0,000458838 

0,000091266 

0,137881492 

0,013698129 

0,002365996 

United Kingdom 
0,000537315 
2 
Note:  size  1  corresponds  to  companies  with  less  than  10  employees,  size  2  to 
companies with 10 to 49 employees, size 3 to companies with 50 to 249 employees 
and size 4 to companies with 250 employees or more. 

0,000268370 

4 

Survey implementation 

In a first phase, the sample of companies was invited by email to respond to an 
online version of the survey (available in 12 languages: EN, FR, DE, IT, ES, EL, PT, 
SE, PL, BG, RO, HU) between 20 April and 30 June 2015.  

Despite  several  reminders,  the  number  of  responses  to  this  online  version  of  the 
survey remained low with only 962 complete responses 37% of the target of 2600 
responses).  As  a result,  two  companies  were  sub-contracted to  perform  telephone 
interviews to complete the questionnaires. The telephone campaign was carried out 
between  8  and  30  June.  Companies  contacted  by  phone  were  randomly  selected 
from the full set of companies that were initially invited to the survey, thus keeping 
to  the  original  representative  sample.  1,715  complete  responses  were  collected 
through  the  telephone  campaign,  leading  to  an  overall  total  of  2,677  complete 
responses.  The  survey  data  collected  for  this  study  is  the  most  complete,  most 
representative and most up to date dataset on late payments in Europe. 

The table below shows the number of responses collected by country. 

Figure A.2.7. Survey responses by country  

Country 
Austria 
Belgium 
Bulgaria 
Croatia 
Cyprus 
Czech Republic 
Denmark 
Estonia 
Finland 
France 
Germany 
Greece 

Number of responses 
114 
79 
63 
66 
89 
31 
35 
22 
11 
143 
222 
145 

87 

 
 
 
 
 
 
 
 
 
Country 
Hungary 
Ireland 
Italy 
Latvia 
Lithuania 
Luxembourg 
Malta 
Netherlands 
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Spain 
Sweden 
United Kingdom 
Total 

Number of responses 
47 
12 
476 
24 
28 
57 
49 
62 
41 
87 
74 
39 
53 
299 
60 
249 
2677 

15.1.2. 

Interviews at Member State level 

A proposed list of organisations to be consulted was drafted in accordance with the 
Terms  of  Reference  and  reaffirmed  during  the  inception  phase.  Interviews  with 
industry stakeholders and public authorities were conducted by phone.  
Prior to contacting the interviewees, we translated the interview guide and we also 
drafted an introductory email in some of the national languages of the interviewees. 
We  believed  that  information  provided  in  the  native  languages  was  going  to  help 
the interviewees understand the purpose of the study. A number of interviews were 
conducted  in  the  national  languages  of  the  interviewees  and  these  included 
interviews  in:  Austria,  Belgium,  Bulgaria,  Germany,  France,  Luxemburg,  Italy, 
Ireland, Malta, Poland, Spain, Sweden, and UK.  
Lastly, two round table discussions were organised. The first round table took place 
in  London  on  12  June  2015  and  was  co-organised  by  the  European  DIY-Retail 
Association.  The  second  round  table  discussion  took  place  in  Brussels  and  was 
hosted  by  Eurocommerce.  In  total,  18  organisations  (11  national  industry 
associations as well as seven companies) were present at these meetings.  

Figure A.2.8: Breakdown of interviews per MS and type of stakeholder  

ALL 

Public authority 

Industry 

Other 

Completed 

Austria 
Belgium 
Bulgaria 
Cyprus 
Croatia 
Czech 
Republic 
Denmark 
Estonia 
Finland 
France 
Germany 
Greece 
Hungary 
Ireland 
Italy 
Latvia 
Lithuania 
Luxemburg 
Malta 
Netherlands 
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 

1 
1 

1 

1 

1 

1 
2 

1 
2 

2 
1 
1 
1 
1 

1 
1 

3 
4 
3 
3 
2 

2 

2 
3 
4 
4 
5 
5 

7 
9 
4 

2 
2 
6 

6 
3 
1 
2 

2 

1 

4 
5 
3 
4 
4 

3 

3 
3 
5 
6 
5 
5 
1 
8 
11 
4 
2 
3 
3 
7 
1 
6 
3 
2 
3 

88 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Evaluation of Late Payment Directive 

Spain 
Sweden 
UK 

Total 

1 
1 

1 

22 

9 
6 

5 

102 

1 

4 

11 
7 

6 

128 

A  list  of  public  authorities  was  provided  to  the  study  team  by  the  European 
Commission.  We  received  names  of  the  individuals  that  gave  their  consent  to  be 
directly  contacted  by  the  study  team.  Furthermore,  following  the  meeting  held  on 
13  April  2015  between  the  European  Commission,  national  experts  and  the  study 
team, it was agreed that the national experts were going to provide an indication of 
which national (business) stakeholders should be contacted in the respective MS. 

15.1.3.  Follow-up interviews  

Follow-up  interviews  with  companies  took  place  between  June  and  September 
2015.  The  follow  up  interviews  focused,  but  were  not  limited  to,  companies  that 
participated in the online survey.   

We  derived  a  list  of  companies  that  expressed  their  interest  in  taking  part  in  the 
follow-up  interview.  Over  120  companies  indicated  willingness  to  engage  with  the 
study  team.  Taking  into  account  that  the  follow-up  interviews  needed  to  focus  on 
costs  incurred  by  companies  due  to  late  payment,  the  study  team  contacted 
companies which positively answered the following questions: 

  Are you aware that your company is entitled to compensation and 

interest in the event of a late payment? (Q17of the survey) 

  Practice with claiming interest or compensation (Q18 of the survey)  
  Other activities undertaken in case of late payment (Q20 of the survey).  

This approach enabled the study team to select only companies that were aware of 
their  rights  and  had  an  experience  in  claiming  an  interest  and  /or  compensation. 
The  study  team  also  discussed  the  possibility  to  use  recovery  procedures  for 
unchallenged  claims  and  internal  credit  collection  systems  used  by  companies. 
Overall,  31  companies  from  Belgium,  Bulgaria,  Croatia,  Cyprus,  France,  Greece, 
Hungary, Italy, Luxemburg, Malta, Sweden, Romania and the UK were consulted. 

15.2.  Data analysis  

Primary  data  which  were  collected  through  the  online  survey,  interviews  with 
business  representatives  and  public  authorities  and  follow  up  interviews  with 
companies  were  analysed  in  order  to  answer  the  main  evaluation  questions 
specified  in the terms of reference. Where possible the results of desk reach were 
taken  into  account.  Due  to  lack  of  quantitative  data  all  information  was  analysed 
quantitatively. Recommendations were formulated on the basis of data analysis and 
were included in Section 12 of this report which is the final output of the study.  

15.2.1.  Overview 

The  table  below  presents  an  overview  of  different  data  collection  and  analysis 
techniques which were applied in the evaluation. 

89 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Figure A.2.9: Data collection and analysis techniques applied in the evaluation 

Input for the evaluation 

Relevance per type of evaluation question 

Relevance 

Effectiveness 

Efficiency 

Coherence 

EU added 
value 

Prospective 
questions 

Online Survey 

Quantitative data on the 
effectiveness and EU added 
value questions  

Regression analysis  

Qualitative interview 
with industry 
representatives 

Qualitative interviews 
with public authorities 

Follow up interview 
with companies  

Desk research: 
qualitative and 
quantitative analysis 
of existing documents 
and reporting 

Provide a more in-depth 
understanding of the issues 
investigated in the survey – but 
also to provide information on 
the key success factors of the 
Directive, its potential barriers 
and their outcomes/impacts 

Provide information on the 
outcomes/ impacts of the 
Directives, on their barriers and 
their added value 

Provide key background 
information on the Directives 
and on the potential impacts of 
their application  

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

90 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Evaluation of Late Payment Directive 

15.2.2.  Regression analysis 

Based  on  data  from  the  survey,  regression  analysis  produces  estimates  to  identify  the 
factors that affect variables related to late payment. 

Inference  tests  are  conducted  to  examine  the  statistical  significance  of  the  effects  of 
factors  on  a  dependent  variable  or  on  the  probability  of  occurrence  of  an  event.  Odd 
ratios101 and coefficients are examined to assess the magnitude of these effects. Several 
dimensions  are  observed  simultaneously  as  the  method  allows  for  a  multivariate 
approach. 

This section addresses the following questions:   

  What factors are associated with the awareness of the rules regulating late 

payments across European countries? 

  Which companies are more likely to experience late payments? 
  Which companies are more likely to claim for the provisions in the directive?  
  What factors are increasing the probability of the companies facing difficulties 

to pay within contractually agreed terms?  

  What factors are related to the payment terms applied by companies? Which 
companies has experienced a change in the average of the payment delays? 

15.2.2.1. Methodology  

Different  regression  methods  were  carried  out  in  order  to  address  appropriately  the 
nature  of  the  response  variable:  logit,  multinomial  logit  and  ordinary  least  squares 
(OLS). 

Logit model 

The regression analysis was conducted in order to estimate the impact of several factors 
on the following variables:   

  Awareness of the rules regulating late payments: binary variable that is equal 

to one if the company was aware of these rules, zero otherwise.  

  Late payment experience: binary variable that is equal to one if the company 
had experienced payment delays in the last three years, zero otherwise.  

  Claim for provisions under the directive: variable based on the question “in 

your experience, does your company exercise its right to claim compensation 
and/or interest in the event of late payments?”. Possible answers were 
“always”, “sometimes” and “never”. The variable used is a binary variable that 
is equal to one if the company has exercised its rights to claim compensation 
and/or interest, zero otherwise.  

101 Odds of an event correspond to the probability of success of this event divided by the probability of failure. 
An odds-ratio related to a discrete factor is the ratio between the odds when the factor is observed and the 
odds when the factor is not observed. An odds-ratio of 1 implies that the factor has no effect on the odds 
of the event. 

91 

 
 
 
 
 
 
 
 
 
 
 
 
                                                 
  Difficulties paying suppliers within agreed terms: variable based on the 

question “in the last year, has your company faced difficulties paying suppliers 
within contractually agreed terms?”. The variable used is a binary variable 
equal to one if the company had difficulties, and zero otherwise.  

We  tested  the  relationship  between  company  characteristics  and  these  binary  variables 
by estimating a logit model. This relationship is described as follows:  

      (      )  

         (     |        )  

 (                   )
   (                    )                (2) 

Where Yi is a binary variable of the late payment experiences or behaviours of company i 
(i.e dependent variable) that follows a binomial distribution; F is a vector of company’s 
characteristics  such  as  age,  turnover,  SME  (i.e.  less  than  250  employees)  and  type  of 
main customers’ clients (other business and public authorities). Country (C) and Sector 
(S) effects were also included to control for any difference in the implementation of the 
directive in each country and for any discrepancies that may exist between sectors.  

The  regression  analysis  was  carried  out  using  data  of  1929  companies.  We  excluded 
from  the  analysis  companies  with  only  consumers  as  main  clients  (539  observations) 
and  the  questionnaires  for  which  no  answer  was  available  for  questions  related  to  the 
late payment experiences and behaviours (about 200 obs.).  

OLS 

In  order  to  determine  which  characteristics  of  the  companies  have  an  effect  on  the 
payment terms applied by companies, we estimated the following equation:    

                                                                                 (2)      

Where Pi is the average number of days of the payment delays that the companies have 
experienced.  This  variable  was  created  from  the  question  “to the  best  of  your 
knowledge, what is the actual average payment delay (in days)”. The responses to this 
question were given in ranges. In order to build a continuous variable, we estimated the 
average of the following ranges: 0-14; 15-30; 31-45; 46-60; 61-90; 91-120; 120-365. 
This  question  was  limited  to  companies  whose  main  clients  were  other  businesses.  As 
explanatory variables, we included the awareness of rules regulating late payment (X1), 
company’s characteristics, country and sector effects.  Ordinary least squares regression 
method was used.  

Multinomial logit 

As additional results, we considered that the observed changes in the average payment 
delays might be influenced by characteristics of the companies. As the response variable 
is  not  binary  (deterioration  of  delays,  improvement,  or  no  change)  we  estimated  a 
multinomial  logit  model,  which  generalises  the  logit  model  to  multiclass  analysis  when 
there are more than two outcomes.  

92 

 
 
 
 
 
 
 
 
 
Evaluation of Late Payment Directive 

15.2.2.2. Results  

The  table  below  presents  the  results  of  the  logit  regressions.  Odd  ratios  significantly 
larger (respectively smaller) than one correspond to a positive (resp. negative) effect of 
the factor on the probability related to the response variable. 

Regarding awareness of the rules regulating late payments in commercial transactions in 
the  country  (see  model  I),  size,  age  and  type  of  client  of  the  company  present 
statistically  significant  impact  (i.e.  odds  ratios  are  statistically  different  from  1).    SME 
companies are less likely to be aware of the rules regulating late payment. On the other 
hand, oldest companies are more likely to be aware of these rules than youngest ones. 
Companies with only public authorities as main clients are more prone to be aware of the 
late  payment  rules  compared  with  companies  with  mixed  group  of  clients  (e.g.  other 
businesses  and  consumers).  However,  this  relationship  is  no  longer  significant  when 
sector is included in the model specification. This means that having public authorities as 
a  main  client  is  to  be  related  to  the  company’s  sector  affiliation  and  mediates  the 
relationship between type of client and awareness of the rules. 

Model  II  presents  the  findings  related  to  the  likelihood  of  experiencing  late  payment. 
According  to  the  logistic  regression  analysis,  companies  older  than  5  years  are  more 
likely  to  experiment  late payments  compared  with  younger companies.  In  addition,  the 
share  of  the  turnover of  the  company’s sales  in  the  country  slightly  correlates  with  the 
probability of experiencing late payment.   

Model  III  shows  that  SME  companies  are  less  likely  to  exercise  the  right  to  claim 
compensation and/or interest in the event of late payment. Companies with only public 
authorities  as  main  clients  are  more  prone  to  claim  for  these  provisions  but  this 
relationship disappears when sectors are taken into account.  

Findings in the table below also show that companies with only public authorities as main 
clients are more inclined to face difficulties paying suppliers within contractually agreed 
terms  by  companies  (model  IV).  Size  and  age  of  the  companies  do  not  seem  to  be 
related to reporting difficulties to pay. 

Regarding  the  country  and  sector  effects  on  late  payment  experiences  and  behaviours, 
the figures below show the non-adjusted (when only sectors are included in themodels) 
and  adjusted  (when  all  factors  are  included  in  the  models)  odds  ratio  of  these  effects. 
Differences  are  observed  across  countries  but  the  effects  are  reduced  when  the 
characteristics of the companies were taken into account. The same results are observed 
for sectors.  

The average number of days of payment delays applied by companies are related to the 
size, age and turnover of the companies. SMEs show longer periods of payment delays 
applied  to  their  consumers  than  large  firms.  Companies  older  than  10  years  apply  on 
average  15  more  days  of  payment  delays  than  other  companies.  However  this  effect 
becomes non-significant when country effects are considered in the analysis. This means 
that  the  characteristics  related  to  countries  (business  culture,  regulatory  framework, 
etc.)  act  as  a  mediator  between  age  and  the  average  number  of  payment  delays.  The 
share of sales in the country is statistically significant for explaining the average number 
of  payment  delays  (negative  impact)  but  this  effect  disappears  when  sectors  are 
included in the model specification. Thus, sector effects capture the relationship between 

93 

 
 
 
 
 
 
 
 
 
turnover and average number of days. Awareness of the rules regulating late payment is 
not a significant determinant of the average number of days of payment delays. 

The  odds  ratios  related  to  the  observed  changes  in  the  average  payment  delays  are 
presented in the table below. Odds ratios related to improvement and deterioration are 
to  be  interpreted separately  in  comparison  with  a situation  were  no  change is  reported 
by  the  company.  Companies  with  10-49  employees  are  more  likely  to  report  a 
deterioration  in  their  average  payment  delays  in  the  last  three  years.  However,  this 
relationship  becomes  non-significant  when  countries  are  included  in  the  model. 
Companies  with  public  authorities  as  main  clients  are  also  less  likely  to  observe  a 
deterioration  in  their  average  payment  delays,  and  this  effect  remains  significant  after 
including  both  country  and  sector  controls  in  the  model.  The  same  result  was  obtained 
for  awareness  of  the  rules  regulating  late  payment.    Being  aware  of  the  rules  also 
increases  the  probability  to  observe  an  improvement  in  the  late  payments  delays 
compared with no change in the delays, but this effect is no longer significant when we 
add country effects.  

94 

 
 
 
 
 
 
 
Evaluation of Late Payment Directive 

Figure A.2.10 Late payment experiences or behaviours of the companies, EU-28. Odds-ratio estimates. 

95 

 
 
 
 
 
 
 
 
 
Figure  A.2.11:  Odds  ratio*  of  countries  in  models  of  late  payment 
experiences and behaviours 

96 

 
 
 
 
 
Evaluation of Late Payment Directive 

Figure A.2.12: Adjusted odds ratio* of countries in models of late payment 
experiences and behaviours  

*  Odds  ratio  adjusted  by  sector,  size,  age,  turnover  and  main  consumers  of  the  companies.  
The reference country was Australia. Red line in one.  Dots refers to CI (95%)  

97 

 
 
 
 
 
 
 
 
 
Figure A.2.13: Odds ratio of sector in models of late payment experiences 
and behaviours  

98 

 
 
 
Evaluation of Late Payment Directive 

Figure A.2.14: Adjusted odds ratio* of sector affiliation of the companies in 
models of late payment experiences and behaviours  

* Odds ratio adjusted by country, size, age, turnover and main consumers of the companies.  
The reference sector was other sectors (i.e. mining, water supply, public administration and 
arts). 

99 

 
 
 
 
 
 
 
 
 
 
 
Figure  A.2.15:  Payment  terms  applied  by  companies,  EU-28.  OLS 
estimations. 

Figure  A.2.16:  Odds  ratio  of  the  observed  change  in  average  payment 
delays compared with no change. Companies in EU 28. Multinomial logit 

The dependant variable was created from question: "in your experience, have your noticed any change 
in average payment delays  in the  last three years?"  - Responses: an improvement, a deterioration,  no 
change. The reference of the dependant variable was “No change” in the average payment delays. 

100 

Table.(cid:9)(cid:9)Observed(cid:9)change(cid:9)in(cid:9)average(cid:9)payment(cid:9)delays(cid:9)compared(cid:9)with(cid:9)no(cid:9)change.(cid:9)Companies(cid:9)in(cid:9)EU(cid:9)28.(cid:9)Multinomial(cid:9)logit(cid:9)A(cid:9)deterioratioAn(cid:9)improvement(cid:9)A(cid:9)deterioration(cid:9)An(cid:9)improvement(cid:9)A(cid:9)deterioration(cid:9)An(cid:9)improvement(cid:9)Odds(cid:9)RatioOdds(cid:9)RatioOdds(cid:9)RatioOdds(cid:9)RatioOdds(cid:9)RatioOdds(cid:9)RatioSize(cid:9)of(cid:9)company(cid:9)(cid:9)Ref(cid:9)(<=9(cid:9)empl.)10-491.92***1.251.150.911.110.90(0.280)(0.214)(0.195)(0.179)(0.193)(0.180)50-2491.271.52**0.821.080.771.10(0.247)(0.306)(0.178)(0.244)(0.171)(0.256)250(cid:9)or(cid:9)more0.951.520.721.150.711.13(0.338)(0.497)(0.270)(0.402)(0.267)(0.404)Age(cid:9)of(cid:9)the(cid:9)company(cid:9)(Ref.(cid:9)=<(cid:9)5(cid:9)years)5-10(cid:9)years0.781.120.671.100.661.06(0.243)(0.430)(0.230)(0.437)(0.230)(0.427)More(cid:9)than(cid:9)10(cid:9)years1.071.430.681.230.691.19(0.293)(0.500)(0.211)(0.454)(0.217)(0.444)Company's(cid:9)main(cid:9)consumersOnly(cid:9)B2B1.100.831.220.981.150.86(0.334)(0.256)(0.391)(0.314)(0.382)(0.285)Only(cid:9)PA2B0.75*0.840.72*0.900.70*0.89(0.127)(0.158)(0.133)(0.178)(0.133)(0.180)1.001.001.001.001.001.00(0.002)(0.002)(0.002)(0.003)(0.002)(0.003)Awareness(cid:9)of(cid:9)the(cid:9)rules(cid:9)regulating(cid:9)late(cid:9)payment0.76**1.33*0.78*1.230.78*1.19(0.099)(0.209)(0.113)(0.208)(0.114)(0.205)Constant0.37**0.22***0.810.15***0.780.26*(0.167)(0.114)(0.467)(0.107)(0.509)(0.204)Observations1,4601,4601,4601,4601,4601,460Log(cid:9)Likelihood-1438-1438-1335-1335-1323-1323Country(cid:9)FEYesYesYesYesSector(cid:9)FEYesYesseEform(cid:9)in(cid:9)parentheses***(cid:9)p<0.01,(cid:9)**(cid:9)p<0.05,(cid:9)*(cid:9)p<0.1The(cid:9)company(cid:9)has(cid:9)noticed(cid:9)any(cid:9)change(cid:9)in(cid:9)average(cid:9)payment(cid:9)delays(cid:9)in(cid:9)the(cid:9)last(cid:9)three(cid:9)yearsModel(cid:9)(VI)Model(cid:9)(VII)Model(cid:9)(VIII)Company's(cid:9)characteristics%(cid:9)turnover(cid:9)of(cid:9)company's(cid:9)sales(cid:9)in(cid:9)country 
 
 
 
Evaluation of Late Payment Directive 

101 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
16. ANNEX 3: CONSULTATION RESULTS  

16.1.  Profile of respondents 

16.1.1.  Size 

Almost 60% of respondents are very small or small companies for 20% of medium 
companies and 20% of large companies. 

Answer  

Up to 9 

10-49 

50 - 249 

250 or more 

Total 

Number of respondents  % of respondents  

53 

99 

56 

54 

262 

20% 

38% 

21% 

21% 

100.0% 

Question: How many staff does your company currently employ?  

16.1.2.  Main customers 

82%  of  respondents  have  other  businesses  as  main  clients  and  33%  have  public 
authorities as main clients. 

Answer  

Number of respondents  % of respondents  

Other businesses (B2B) 

220 

Public authorities 

Consumers (retail) 

89 

74 

82% 

33% 

28%  

Number of respondents: 268 
Question: Who are your company’s main customers?  

16.2.  Main results 

16.2.1.  Awareness of the rules regulating late payment 

Almost 80% of respondents are aware of the rules. 

Answer  

Number of respondents   % of respondents  

Yes 

No 

Total 

210 

55 

265 

79% 

21% 

100.00% 

Question:  Are  you  aware  of  the  rules  regulating  late  payment  in  commercial 
transactions in your country? 

Information  campaign  is  the  first  channel  of  information  (for  one  third  of  the 
respondents).  

Answer  

Number 
respondents 

of 

% of respondents  

Informed by accountant 

75 

28% 

102 

 
 
 
 
 
 
Evaluation of Late Payment Directive 

Answer  

Informed by bank 

Informed by company 

Informed by information campaign 

Other 

Number 
respondents 

of 

% of respondents  

13 

11 

89 

92 

5% 

4% 

33% 

34% 

Number of respondents: 269 
Question:  How  has  your  company  been  informed  about  these  rules?  (tick  all  that 
apply) 

16.2.2.  Average payment terms 

More than 60% of companies can sometimes agree periods of payment that exceed 
60  calendar  days.  Almost  30%  of  companies  never  accept  that  while  10%  always 
agree periods of payment that exceed 60 calendar days.  

Answer 

Always 

Sometimes 

Never 

Total 

Number of respondents  

% of respondents  

23 

138 

66 

227 

10% 

61% 

29% 

100.0% 

Question: In contracts with businesses does your company explicitly agree periods 
of payment that exceed 60 calendar days? 

16.2.3.  Payment delays 

The  respondents  have  almost unanimously (95%)  experienced  payment  delays  in 
the last three years. 

Answer  

Number of respondents  

% of respondents  

Yes 

No 

Total 

215 

11 

226 

95% 

5% 

100.0% 

Question: Has your company experienced payment delays in the last three years? 

103 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For more than one third of the companies (36%) that experienced payment delays 
with other businesses, the delay was superior to 30 days.  

Regarding the companies that experienced payment delays with public authorities, 
the delay rises to more than 60 days for 44% of the respondents.  

Answer  

Number 
respondents  

of 

% of respondents  

Payment delays with other businesses 

Less than 10 days 

Between 10 and 29 days 

Between 30 and 60 days 

More than 60 days 

25 

60 

75 

48 

12% 

29% 

36% 

23% 

Total 

208 

100% 

Payment delays with public authorities 

Less than 10 days 

Between 10 and 29 days 

Between 30 and 60 days 

More than 60 days 

18 

24 

33 

58 

14% 

18% 

25% 

44% 

Total 

131 

100% 

Question: To the best of your knowledge, what is the actual average payment delay 
(in days)? 

The  situation  has  improved  in  the  last  three  years  for  28%  of  companies  that 
experienced payment delays with other businesses and for 39% of companies that 
experienced payment delays with other public authorities. 

The situation has not changed for 37% of the respondents as regards the payment 
delay  for  B2B  contracts,  and  for  46%  with  respect  to  contracts  with  public 
authorities. 

Even  though,  it  is  worth  noticing  that  for  35%  the  companies  that  experienced 
payment delays with other businesses, the situation worsens.  

Answer  

Number 
respondents  

of 

% of respondents  

Change in average payment delay for B2B contracts 

No change 

A deterioration 

An improvement 

Total 

76 

73 

58 

37% 

35% 

28% 

207  

100% 

Change in average payment delay for contracts with public authorities 

No change 

66 

46% 

104 

 
 
 
 
 
 
 
 
Evaluation of Late Payment Directive 

Answer  

A deterioration 

An improvement 

Total 

Number 
respondents  

of 

% of respondents  

21 

55 

142 

15% 

39% 

100% 

Question:  In  your  experience,  have  you  noticed  any  change  in  average  payment 
delays in the last three years? 

16.3.  Late payers 

SMEs  are  the  customers  that  are  the  most  likely  to  pay  late  (for  41%  of  the 
respondents)  followed  by  large  companies  (37%)  and  then  Public  authorities 
(35%). These results however are linked to the fact that there are fewer companies 
that only deal with public authorities than only with other businesses. 

Number of respondents   % of respondents  

Answer  

SMEs 

Large companies 

113 

100 

Public authorities 

96 

41% 

37% 

35% 

Number of respondents: 273 
Question: In your experience, which types of customers are most likely to pay late? 
(Multiple answers possible) 

According to the companies that experienced payment delay for their contracts with 
public authorities, 41% of the late payments were due to national administrations, 
37% to regional administrations and 35% to local administrations.  

Answer  

Number 
respondents  

of 

% of respondents  

National administrations 

Regional administrations 

Local administrations 

36 

60 

68 

41% 

37% 

35% 

Number of respondents: 273 
Question: If you selected "public authorities", have you experienced late payments 
from any of the following? (Multiple answers possible) 

16.4.  Awareness of rights 

Almost 90% of the companies are aware that they are entitled to compensation and 
interest in the event of a late payment.  

105 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Answer  

Number of respondents   % of respondents  

Yes 

No 

Total 

188 

25 

213 

88% 

12% 

100% 

Question:  Are  you  aware  that  your  company  is  entitled  to  compensation  and 
interest in the event of a late payment? 

16.5.  Actual actions in case of late payments 

Almost one half of the companies (49%) “sometimes” exercise their rights to claim 
compensation and/or interest. 41% do not exercise these rights.  

Answer  

Always 

Sometimes 

Never 

Total 

Number of respondents   % of respondents  

17 

92 

77 

186 

9% 

49% 

41% 

100% 

Question:  In  your  experience,  does  your  company  exercise  its  right  to  claim 
compensation and/or interest in the event of late payments? 

For almost one half of the companies (49%), the main reason is to maintain good 
commercial relationships. For 26% it is because it is considered not cost effective. 

Answer  

Number 
respondents  

of 

% of respondents  

Maintain good commercial relationships  134 

Not cost effective 

Other 

71 

34 

49% 

26% 

12% 

Number of respondents: 273 
Question: Why does  your company  not  always  claim  interest  and  compensation  in 
the event of a late payment (Multiple answers possible)? 

38%  of  the  companies  never  use  external  financing  to  ensure  liquidity  in  case  of 
late payment against more than 60% that use it (always or sometimes).  

Answer  

Number 
respondents  

of 

% of respondents  

Use external financing to ensure liquidity 

Always 

Sometimes 

Never 

Total 

43 

81 

77 

201 

21% 

40% 

38% 

100% 

Question: In case of late payment, does your company (sometimes, never, always) 
use external financing to ensure liquidity (e.g. bank loan)? 

106 

 
 
 
 
 
 
 
 
Evaluation of Late Payment Directive 

Almost 60% of the companies (58%) sometimes use external legal advice or debt 
agency to recover unpaid invoices. 

Answer  

Number 
respondents  

of 

% of respondents  

Use legal advice or debt agency to recover unpaid invoices 

Always 

Sometimes 

Never 

Total 

32 

109 

46 

187 

17% 

58% 

25% 

100% 

Question: In case of late payment, does your company (sometimes, never, always) 
use legal advice or debt agency to recover unpaid invoices? 

Almost  60%  of  the  companies  (58%)  sometimes  engage  in  litigation  or  use 
alternative dispute resolution to recover unpaid invoices 

Answer  

Number 
respondents  

of 

% of respondents  

Engage in litigation or use alternative dispute resolution to recover unpaid invoices 

Always 

Sometimes 

Never 

Total 

25 

101 

48 

174 

14% 

58% 

28% 

100% 

Question: In case of late payment, does your company (sometimes, never, always) 
engage in litigation or use alternative dispute resolution to recover unpaid invoices? 

16.6.  Difficulties in paying suppliers 

Seven  respondents  out  of  ten  (73%)  state  they  did  not  have  difficulties  in  paying 
their suppliers in time. 

Answer  

Number of respondents   % of respondents  

Yes 

No 

Total 

70 

193 

263 

27% 

73% 

100% 

Question:  In  the  last  year,  has  your  company  faced  difficulties  paying  suppliers 
within contractually agreed terms? 

Almost one half of the companies (48%) made a significant effort to decrease the 
number of late payments over the year. 

107 

 
 
 
 
 
 
 
 
 
 
 
 
 
Answer  

Number 
respondents  

of 

% of respondents  

Yes, to a large extent 

Yes, to a moderate extent 

Yes, to a small extent 

No 

Total 

34 

27 

8 

2 

71 

48% 

38% 

11% 

3% 

100% 

Question:  Has  your  company  made  efforts  to  decrease  the  number  of  late 
payments over the last year? 

108 

 
 
 
 
Evaluation of Late Payment Directive 

17. ANNEX 4: SURVEY QUESTIONNAIRE AND INTERVIEW GUIDES 

17.1.  Survey questionnaire  

EVALUATION OF THE LATE PAYMENT DIRECTIVE  

Technopolis  Group,  VVA  and  EY  have  been  asked  by  the  European  Commission  to 
assess  the  effects  of  Directive  2011/7/EU  (the  'Late  Payment  Directive')  on 
businesses, employment and growth.  

Country X transposed the Directive through law xxx (name of law) on MM/YY.  

The main provisions of the law are that:  

1.  Public authorities must pay for goods and services that they procure within 

30 days or, in very exceptional circumstances, within 60 days.  

2.  Businesses have to pay their invoices within 60 days, unless they expressly 

agree otherwise and provided it is not grossly unfair to the creditor.  

3.  Businesses  are  entitled  to  automatically  claim  interest  for  late  payment  as 

well as a fixed sum as compensation for recovery costs.  

This  survey  provides  vital  data  on  the  impact  of  late  payments  on  businesses.  It 
takes  approximately  10-15  minutes  to  fill  in  and  all  responses  will  be  anonymised 
and used only in the context of this study.  

Your input will contribute to finding effective solutions to help combat late payment 
in commercial transactions.  

1.  Are  you  aware  of  the  rules  regulating  late  payment  in  commercial 

transactions in your country?  

  Yes/ No  

2.  How  has  your  company  been  informed  about  these  rules?  (tick  all  that 

apply)  

  By your accountant  
  By your bank 
  By another company 
  By an information campaign 
  Other (please specify)  

3.  Where is your company located?  

4.  Please specify the age of your company 

  Less than 5 years  
  5-10 years  
  More than 10 years  

109 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5.  Please specify your company’s turnover for the last year of operation  

  Less than € 2 million  
  € 2 million - € 10 million  
  € 10 million - € 50 million  
  More than € 50 million  

6.  Approximately what proportion of the turnover of your company comes from 

sales...? (Please make sure the total does not exceed 100%)  

In your country 
In other EU countries 

 
 
  Outside the EU  

7.  How many staff does your company currently employ?  

  Up to 9  
  10–49 
  50–249 
  250 or more  

8.  Who are your company’s main customers? (Multiple answers possible) 

  Other businesses (B2B) 
  Public authorities 
  Consumers (retail)  

9.  On average, what payment terms (in days) does your company apply to its 

customers (other businesses only)?  

10. In  contracts  with  businesses  does  your  company  explicitly  agree  periods  of 

payment that exceed 60 calendar days?  

  Sometimes 
  Always 
  Never  

11. Could  you  briefly  explain  in  which  cases  your  company  explicitly  agrees 

periods of payment that exceed 60 days?  

12. Has your company experienced payment delays in the last three years? 

Yes/ No  

13. To the best of your knowledge, what is the actual average payment delay (in 

days)? 

Less  than  10 
days 

Between 
and 29 days 

10 

Between 
and 60 days 

30 

More  than  60 
days 
(please 
specify) 

With 
businesses  

other 

110 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Evaluation of Late Payment Directive 

With 
authorities 

public 

More than 60 days (please specify)  

14. In your experience, have you noticed any change in average payment delays 

in the last three years?  

An improvement  

No change  

A deterioration  

In 
to 
business 
business contracts  

In  contracts  with 
public authorities  

15. In  your  experience,  which  types  of  customers  are  most  likely  to  pay  late? 

(Multiple answers possible)  

  SMEs  
  Large companies  
  Public authorities  

16. If  you  selected  "public  authorities",  have  you  experienced  late  payments 

from any of the following? (Multiple answers possible)  

  National administrations  
  Regional administrations  
  Local administrations  

Can you please gives examples of specific public administrations with which 
you have experienced late payments?  

17. Are you aware that your company is entitled to compensation and interest in 

the event of a late payment?  

  Yes/ No 

18. In  your  experience,  does  your  company  exercise  its  right  to  claim 

compensation and/or interest in the event of late payments?  

  Always 
  Sometimes 
  Never  

19. Why does your company not always claim interest and compensation in the 

event of a late payment (Multiple answers possible)? 

111 

 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
  To maintain good commercial relationships with our customers 
 

It  is  not  cost  effective  (e.g.  the  amounts  are  too  small,  claiming  is 
too costly/time consuming) 

  Other (please specify)  

20. In case of late payment, does your company...  
Sometimes  

Always  

Never  

...  use  legal  advice 
or  debt  agency  to 
recover 
unpaid 
invoices?  

...  use  external 
financing  to  ensure 
liquidity  (e.g.  bank 
loan)?  

... 
in 
engage 
litigation  or  use 
alternative  dispute 
to 
resolution 
recover 
unpaid 
invoices?  

21. Do you have any further suggestions on how to combat late payments?  

22. In the last year, has your company faced difficulties paying suppliers within 

contractually agreed terms? 

  Yes/ No  

23. Has  your  company  made  efforts  to  decrease  the  number  of  late  payments 

over the last year? No  

  Yes, to a small extent 
  Yes, to a moderate extent 
  Yes, to a large extent  

24. What were the reasons for these efforts? (Multiple answers possible) 

  To reduce / avoid compensation payments 
  To reduce / avoid having to pay interest on late payments 
  Other (please specify)  

25. Would  you  be  available  for  a  short  telephone  interview  with  the  research 
team  to  answer  a  few  more  questions  about  the  issue  of  late  payment? 
(your replies will be anonymised)  

  Yes/ No  

26. Can you please indicate 

  Your first and last name  

112 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Evaluation of Late Payment Directive 

  Your email address 
  Your phone number  

We thank you very much for your support  

113 

 
 
 
 
 
 
 
 
 
 
17.2.  Interview guides 

17.2.1. 

Industry associations  

Date 

Interviewee 

Organisation 

Position 

Short introduction of the main provision introduced in the national legislation of the 
interviewee’s country will be provided.  
Relevance 

1.  Do  businesses  exercise  their  rights  as  given  by  the  Directive  and/or 

corresponding national legislation? If not, why? 

2.  Before  the  Directive  was  transposed  into  national  law  in  your  country,  are 
you aware of any court cases initiated against late payers? If so, could you 
provide  more  details?  Has  this  changed  after  the  implementation  of  the 
Directive?  

3.  To  which  extent  do  companies  in  your  country  consider  that  late  payment 
has  a  negative  impact  on  the  operations  of  the  companies  and  their 
economic  development  (capacity  to  innovate,  investment  etc.)?  Are  there 
any data to show the impacts? 

4.  Considering  the  main  objective  of  the  Directive  which  was  to  combat  late 
payments  –  have  the  provisions  of  the  Directive  and/or  national  legislation 
addressed  the  needs  of  businesses?  Are  there  new  challenges  that  have 
emerged since adoption of the Directive that should be addressed?  

Effectiveness 

5.  Are businesses generally aware of the provisions introduced by the Directive 
and  corresponding  national  legislation?  If  not,  what  could  be  done  to 
increase awareness?  

6.  Is  the  payment  period  in  commercial  transactions  monitored  in  your 

country?   

7.  Has the situation improved as regards number of days of payment since the 

implementation of the Directive in your country?  

8.  Has  the  situation  improved  as  regards  number  of  days  of  delay  since  the 

implementation of the Directive in your country? 

9.  What  are  the  benefits  of  establishing  payment  periods  for  businesses  and 
public authorities? If they are not respected in your country, what could be 
the reason for these? Are there any loopholes that businesses and/or public 
authorities use to prolong the payment periods? If so, what are those?  

10. What  impact  has  the  Directive  had  on  the  uncertainty  of  businesses 
regarding  payments  in  cross-border  transactions?  Has  the  uncertainty  been 
reduced since the Directive has been implemented in your country?  

11. What  are  the  practical  barriers  preventing  an  effective  application  of  the 
national  provisions  implementing  the  Directive?  How  could  these  be 
addressed and by whom (EU versus MS)? 

12. Are you aware of any unintended consequences of the implementation of the 

Directive and corresponding national provisions? 

13. Are there any countries that companies are reluctant to export to due to the 
risk  of  receiving  late  payment?  If  yes,  what  are  those  countries?  Has  the 

114 

 
 
 
 
 
 
 
Evaluation of Late Payment Directive 

Directive  and/or  corresponding  national  legislation  had  any  impact  on  this 
situation?  

Efficiency  

14. What  were  the  costs  for  businesses,  including  reporting  and  administrative 
burdens  in  relation  to  late  payments  before  the  implementation  of  the 
directive? Has this changed after the implementation of the Directive in your 
country? Would it be possible to provide any quantitative data demonstrating 
the costs before and after the implementation of the Directive? 

15. What  are  the  benefits  of  the  possibility  to  claim  compensation,  interest  of 
late  payment  or  fix  sum  to  cover  recovery  costs?  How  do  they  compere  to 
the costs of late payments (i.e. external finances to ensure cash flow)?  

16. What aspects of the Directive are the most efficient/inefficient102in terms of 
resources  spent?  Could  you  rank  main  provisions  of  the  Late  Payment 
Directive  using  scale  1  to  4  where  1  stands  for  least  inefficient  and  5  for 
most efficient? 

1 

2 

3 

4 

5 

Interest for late payment   

Compensation for recovery costs  

procedures 

Recovery 
unchallenged claims 
Please explain your answers.  

for 

Coherence  

17. Are  there  any  overlaps/complementarities  between  the  Directive  and  any 

other Community/MS action? 

18. Some  MS  decided  to  introduce  stricter  rules  than  those  introduced  by  the 
Directive103.  What  impacts  have  these  stricter  rules  had  on  debtors  and 
creditors  in  your  country?  Has  this  had  any  impact  on  the  culture  of 
payments in your country?  

19. Are  there  any  additional  measures  that  could  be  taken  to  enhance  the 
effectiveness  of  the  Directive  and  corresponding  national  provisions?  If  so, 
what are these? 

20. Are  you  aware  of  any  prompt  payment  codes,  either  initiated  by  public 

authorities or the industry established in your country? 

21. Has  your  organisation  undertaken  any  activities  to  raise  awareness  of  the 
businesses  about  the  rights  introduced  by  the  Directive  and  the  national 
provisions? If so, could you provide more details about these?  

Added value 

22. What is the added value of the European approach to regulate the issue of 
late payments compared to the individual national legislations in MS? 

Other 

102 An overview of the main provisions of the Directive as implemented in MS was provided in 

introduction  

103 An overview of these rules was provided in introduction. This question was only be asked to the 

stakeholders in countries with stricter rules.  

115 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
23. Do you know any company that has been involved in a court case in relation 

to late payments? If so, could you provide details of this? 

24. Do you have any suggestions who should be interviewed during our 

assignment? 

17.2.2.  Public authorities  

Date 

Interviewee 

Organisation   

Position 

Effectiveness:  

1.  Is  the  payment  period  in  commercial  transactions  monitored  in  your 

country?   

2.  Has the situation improved as regards number of days of payment since the 

implementation of the Directive in your country?  

3.  Has  the  situation  improved  as  regards  number  of  days  of  delay  since  the 

implementation of the Directive in your country? 

4.  Are  there  any  data  to  show  spending  of  public  authorities  linked  to  the 
compensations for late payments claimed by businesses in your country? 

5.  What  are  the  practical  barriers  preventing  an  effective  application  of  the 
national  provisions  implementing  the  Directive?  How  could  these  be 
addressed and by whom (EU versus MS)? 

6.  Are  there  any  legal  barriers  preventing  an  effective  application  of  the 

Directive in your country? How could these be addressed?  

7.  Are you aware of any unintended consequences of the implementation of the 

Directive and corresponding national provisions? 

Efficiency  

8.  What  are  the  costs  for  public  authorities  in  implementing  the  Directive?  Do 

you consider them affordable?  

9.  How has the Stability and Growth Pact influenced compliance with the LPD in 
the  public  sector?  Is  this  the  main  cause  for  late  payments  on  transactions 
between undertakings and public authorities? 

10. Do  you  see  any  administrative  burdens  (in  relation  to  e.g.  awareness 
raising, publication of list of prompt payers, regulating e-invoicing) resulting 
from  the  implementation  of  the  Directive?    How  could  administrative 
burdens be reduced?  

Coherence  

11. Are  there  any  overlaps/complementarities  between  the  Directive  and  any 

other Community/national action? 

12. Some  MS  decided  to  introduce  stricter  rules  than  those  introduced  by  the 
Directive104. What  impacts  have these  had  on debtors  and  creditors in  your 
country? Has this had any impact on the culture of payments?  

104 An overview of these rules was provided in introduction. This question was only be asked to the stakeholders in countries with stricter rules.  

116 

 
 
 
 
 
 
 
 
 
 
                                                 
Evaluation of Late Payment Directive 

13. Are  there  any  additional  measures  that  could  be  taken  to  enhance  the 

effectiveness of the Directive? If so, what are these? 

14. Have you established any prompt payment codes?  

15. Have  you  undertaken  any  activities  to  raise  awareness  of  the  businesses 
about the rights introduced by the Directive? If so, could you provide more 
details about these?  

Other 

16. What  are  the  improvements  made  two  years  following  the  transposition  of 
the  Directive  into  national  laws  in  your  country?  Are  there  any  figures  to 
demonstrate  these  improvements?  What  was  the  methodology  used  to 
calculate these figures? 

17. Are you aware of any public authority involved in the court case due to late 

payments? If so could you provide details? 

18. Do  you  have  any  suggestion  who  should  be  interviewed  during  our 

assignment? 

117 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
18. ANNEX 5: INTERVIEW CONTACTS 

18.1.  Scoping interviews 

Scoping interviews 

 
 
 
 
 
 
 
 

UAPME (The voice of SMEs in Europe);  
Eurochambers; 
Eucomed Medical Technology; 
FoodServiceEurope;  
CEEP (the European Centre of Employers and Enterprises providing Public Services); 
European Builders Confederation (EBC);  
European Construction Industry Federation; and 
European-DIY Retail Association. 

18.2.  Interviews at MS level  

Country  
Austria 

Name of Organisation  
1.  Austrian Economic Chamber105 
2.  Verband der öffentlichen Wirtschaft und Gemeinwirtschaft Österreichs 

Belgium 

Bulgaria 

Croatia 

Cyprus 

(VÖWG) 

3.  KSV1870 - Credit protection association 
4.  Federal Ministry of Science, Research and Economy 

1.  Ministry of Justice 
2.  Unie van Zelfstandige Ondernemers - UNIZO 
3.  Graydon 
4.  COMEOS 
5.  Bouwunie – Flemish Federation of SMEs of construction 

1.  Bulgarian Industrial Association 
2.  Bulgarian Construction Chamber 
3.  Bulgarian Association of Medical Devices Entrepreneurs 

1.  Croatian Employers' Association  
2.  National/academic expert  
3. 
4.  National/academic expert 

Innovative Pharmaceutical Initiative 

1.  Cyprus Chamber of Commerce and Industry 
2.  Cyprus Employers & Industrialists Federation – OEB 
3.  Ministry of Energy, Commerce Industry and Tourism 
4.  Cyprus Association of Research and Development Pharmaceutical 

Companies 

Czech Republic 

1.  Ministry of Justice 
2.  Czech confederation of commerce and tourism 
3.  SPS – Czech Association of Building Entrepreneurs 

Denmark 

Estonia 

Finland 

1.  Ministry of Justice 
2.  Håndværksrådet/Danish Federation of Small and Medium-Sized Enterprises 
3.  Organisation asked to be completely anonymised  

1.  Estonian Ministry of Justice 
2.  Estonian Chamber of Commerce and Industry 
3.  Estonian Employers Confederation 

1.  Ministry of Justice 
2.  Helsinki Region Chamber of Commerce 
3.  Federation of Finnish Enterprises 
4.  Finnish Hardware Association 
5.  Finnish Commerce Federation 

105  Fachverband  der  Nahrungs-  und  Genussmittelindustrie  asked  to  refer  to  the  interview  we  held  with 

the Austrian Chamber of Commerce. 

118 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Evaluation of Late Payment Directive 

France 

1.  Direction des affaires juridiques des ministères économiques et financiers 
2.  Ministère de l’Économie, des Finances et de l'Industrie  
3.  CCI International 
4.  Chambre des Metiers et de l’Artisanat 
5.  FMB - La Fédération des magasins de bricolage et de l'aménagement de la 

maison 

6.  FCD - Federation Des Entreprises Du Commerce Et De La Distribution 

Germany 

1.  HDB – Hauptverband der Deutschen Bauindustrie 
2.  BVÖD - Bundesverband öffentliche Dienstleistungen - Deutsche Sektion 

Greece 

des CEEP e.V. 

3.  HDE – Handelsverband Deutschland 
4.  ZDB – Zentralverband des Deutschen Baugewerbes 
5.  Zentralverband des Deutschen Handwerks und Unternehmerverband 

Deutsches Handwerk - ZDH und UDH 

1.  SEVT - Federation of Hellenic Food Industries 
2.  Greek Medical Devices Association 
3.  National Confederation of Hellenic Commerce - ESEE 
4.  PEDMEDE – Panhellenic Association of Engineers Contractors of Public 

works  

5.  GSEVEE - Hellenic Confederation of Professionals, Craftsmen and 

Merchants  

Hungary 

1. 

Institute for Economic and Enterprise Research 

Ireland 

Italy 

Irish Credit Management Institute 

1.  Department of Jobs, Enterprise & Innovation 
2. 
3.  Small Firms Association 
4.  Chambers Ireland 
5.  Hardware Association Ireland 
6.  Banking and Payments Federation Ireland 
7. 
8.  Retail Ireland  

Irish Small and Medium Enterprises Association 

1.  Confederazione Generale dell' Industria Italiana - CONFINDUSTRIA 
2. 
Industrial Association of Navora 
3.  Ministry of Economic Development -  

Div. XIII  Politiche industriali comunitarie 

4.  ANCE – National association of building constructors 
5.  CONFARTIGIANATO Imprese 
6.  CNA – National association of SMEs 
7.  ANAEPA - Associazione Nazionale Artigiani dell'Edilizia dei decoratori, dei 

Pittori e Attività Affini 
8.  Ragioneria dello Stato 
9.  Assobiomedica 
10.  Confcommercio 
11.  Federdistribuzione 

Latvia 

Lithuania 

Luxembourg 

1.  Association of Commercial Banks of Latvia - ACBL 
2.  Employers' Confederation of Latvia - LDDK 
3.  Business Union of Latvia 
4.  Latvian Builders Association 

1.  Ministry of Economy of Lithuania 
2.  Public Procurement Office 

1.  Ministry in charge of public works 
2.  Luxembourg Chamber of Commerce 
3.  Chamber of Craft Businesses 

Malta 

1.  Ministry for Finance  
2.  Malta Chamber of SMEs 

119 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Netherlands 

3.  Malta Credit Association 

1.  FNLI – Federatie Nederlandse Levensmiddelen Industrie 
2.  Vereniging VNO-NCW 
3.  VCMB - Credit management branche 
4.  Raad Nederlands Detailhandel - RND 
5.  Ministerie van Veiligheid en Justitie 
6.  DNB Netherlands 
7.  Detailhandel Nederland 

Poland 

1.  Ministry of Economy  

Portugal 

1.  Associaçáo Industrial Portuguesa - AIP 
2.  CIP - Confederação Empresarial de Portugal 
3.  Portuguese Chamber of Commerce and Industry 
4.  Portuguese Agency for Competitiveness and Innovation 
5.  FEPICOP - Federação Portuguesa da Indústria de Construção e Obras 

Públicas 

6.  Associação Portuguesa das Empresas de Dispositivos Médicos 

Romania 

1.  AMRCR - Asociatia Marilor Retele Comerciale din Romania 
2.  Consiliul National al Intreprinderilor Private Mici si Mijlocii din Romania - 

CNIPMMR 

3.  Chamber of Commerce and Industry of Romania 

Slovak Republic 

1.  Ministry of Justice 
2.  Slovak Medical Devices Association 

Slovenia 

Spain 

Sweden 

United Kingdom 

1.  Ministry of Finance 
2.  Slovenian Chamber of Commerce and Industry 
3.  Chamber of Craft and Small Business of Slovenia 

1.  CNC - Confederacion Nacional de la Construccion 
2.  Pere Brachfield, EAE Business School 
3.  Asociación de Distribuidores de Ferretería y Bricolage 
4.  Spanish Association of Medical Technology Companies 
5.  Federacion Autonomos - National Associarion for Independent Workers 
6.  Farmaindustria 
7.  CEEP - European Centre of Employers and Enterprises providing Public 

Services  

8.  FENIL - Federación Nacional de Industrias Lácteas 
9.  ADFB - Asociación de Distribuidores de Ferretería y Bricolaje 

10.  ASEDAS – Asociacion Espanola de Distribuidores, Autoservicios y 

Supermercados 

11.  Ministry of Justice 

1.  Ministry of Justice 
2.  Confederation of Swedish Enterprise 
3.  Svensk inkasso 
4.  Swedish Federation of Business Owners 
5.  Swedish Construction Federation 
6.  FKG - the Scandinavian Automotive Supplier Association 
7.  Swedish Trade Association  

1.  Department for Business, Innovation and Skills -BIS 
2.  British Chamber of Commerce 
3.  Federation of Small Businesses 
4.  UK Food and Drink Federation 
5.  National Federation of Builders 
6.  BRC – British Retail Consortium  

18.3.  Follow-up interviews 

Country  
Belgium 

Bulgaria 

Name of Company 
1.  Menogroup 

2.  DutchMed 

120 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Evaluation of Late Payment Directive 

Croatia 

Cyprus 

France 

Greece 

3.  Evdito Ltd 
4.  Balkanika Energy 
5.  Bulpro 
6.  Kompozit-kemija Ltd 

7.  L.K. Biosearch LTD 
8.  Nemitsas LTD 
9.  Zaggoulos Ideal Home 
10. Panchris Group 

11. Aose 
12. CMN 
13. Imprimerie Noel 

14. Icon Group 
15. Analab 
16. Grivakis 
17. Mandrekas S.A. 
18. Magnitiki Chiou 

Hungary  

19. Pipelife  

Italy 

20. Emmebi Ricambi 
21. Giardini Srl 
22. Salumificio Vitali 
23. Roche Diagnostic 

Luxembourg 

24. Constantini Group 

Malta 

25. Patrick Tabone 

26. Vella Falzon Group 
27. J M Vassallo Vibro Blocks Ltd 

Sweden 

28. Dorotea Mekaniska 
29. Lantmännen 

Romania  

30. SemmelRock 

United Kingdom 

31. F R Benson & Partners Ltd 

121 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
19. ANNEX 6: EVALUATION QUESTIONS 

For each evaluation question, a list of judgment criteria and indicators was defined 
covering  the  main  evaluation  criteria,  i.e.  relevance,  effectiveness,  efficiency, 
coherence  and  complementarity  and  EU  added  value.  The  list  of  judgment  criteria 
and  indicators  were  agreed  with  DG  GROW  to  guide  the  development  of  data 
collection  tools.  The  table  below  presents  the  evaluation  framework,  including  the 
evaluation  questions,  judgment  criteria,  indicators,  and  main  data  collection  tools 
and sources. 

122 

 
 
Evaluation of Late Payment Directive 

Table A.6.1 Evaluation framework 

Evaluation Questions 
Effectiveness: The extent to which the objectives set are achieved. Which main factors have contributed or stood in the way of achieving those objectives? 

Judgment criteria 

Indicators 

Main Data collection tools and sources  

To  what  extent  has  the  late  payment 
Directive  contributed  to  a  reduction  in  the 
average  delays  of 
in 
commercial transactions? 

late  payments 

Stricter  and  more  consistent  rules  on  late 
payments in commercial transactions 
It 
authorities  and  businesses 
payments 

for  public 
to  delay 

is  harder/more  costly 

To  what  extent  has 
the  Directive 
contributed  to  a  reduction  in  payment 
periods? 

Payment  periods  both  in  public-private 
and  business  transactions  have  been 
reduced 
Stricter  and  more  consistent  enforcement 
of enterprises’ rights to swift payment 

To what extent has the Directive positively 
influenced  liquidity/cash  flow?  (with  a 
particular focus on SMEs)? 

feel 
to 

To what extent has the Directive facilitated 
cross-border  trade?  To  what  extent  do 
businesses 
more 
confident/encouraged 
trade  across 
European borders? 
What  are  the  factors  for  an  effective 
application  of  the  Directive  and  how  could 
the  Directive  be  rendered  more  effective? 
If  there  are  any  barriers,  how  could  they 
be overcome? 

Companies  –  SMEs  –  improve  their  cash-
flow by reducing direct and administrative 
costs of late payments 
Companies  are  less  often  required  to 
pursue late payments, freeing up capacity 
Facilitation  of  cross-border  trade  between 
Member States. 
Companies treat cross-border transactions 
similarly  to  intra-country  transactions  in 
terms of payment procedures. 
There  are  potential  barriers  in  terms  of 
practical  and  legal  issues  as  well  as 
market 
effective 
structure 
application of the Directive,  
There are cost-effective ways to overcome 
these barriers 
There  are  good  practices  that  render  the 

the 

to 

 

 

 

 

 

 

 

 

 

Average  number  of  days  of  payment 
delay 
o 
o 

In PA2B transactions  
In B2B transactions  

Survey with companies  
Regression results 

 
 
  Qualitative  interviews  with  industry 
associations and public authorities 

In PA2B transactions  
In B2B transactions  

In PA2B transactions  
In B2B transactions  

Average  number  of  days  of  payment 
duration  
o 
o 
Average length of payment terms 
o 
o 
Liquidity  of  businesses  (before  and 
after  the  entry  into  force  of  the 
Directive)  
Impact 
of 
redundancies 
Awareness  of  businesses  about  the 
rights conferred by the Directive 
Reduction 
payment on cross border transactions 

uncertainty 

payment 

about 

late 

on 

in 

Barriers preventing effective 
application of the Directive 
Increase/decrease in use of the 
Directive’s provisions (claiming 
interest rate, recovery compensation 
costs etc.) 

Index  (Intrum 

  Desk research  
 

European  Payment 
Justitia) 
Survey with companies  
Regression results 

 
 
  Qualitative 

interviews 

industry 

associations and public authorities 

  Desk research  
 

European Payment Index (Intrum 
Justitia) 
Survey with companies  
Regression results 

 
 
  Desk research  

 
 

Survey with companies  
Follow  up 
respondents 

interviews  with  survey 

  Qualitative  interviews  with  industry 

 

associations 
Survey  with 
questions for SMEs) 
Regressions results 

companies 

(special 

 
  Qualitative  interviews  with  industry 

associations 

  Qualitative 
authorities 

interviews  with  public 

123 

 
 
 
 
 
 
 
 
 
 
 
 
Evaluation Questions 

Judgment criteria 
Directive more effective in its application 

Indicators 

Does  the  Directive  have  any  unintended 
consequences? 

The  Directive  has  engendered  wider 
impacts that were not originally planned 

  Qualitative information regarding 

unintended consequences, whether 
positive or negative 

 

 

Main Data collection tools and sources  
interviews  with  survey 
 

Follow  up 
respondents 
Evidence  from  qualitative  interviews 
with  public  authorities  and  industry 
associations 
Follow  up 
respondents 

interviews  with  survey 

Efficiency: The extent to which the desired effects are achieved at reasonable costs. Is the administrative burden created by the implementation of the Directives’ concepts and 
procedures considered proportionate? 
To  what  extent  are  the  regulatory  costs 
proportionate to the benefits achieved? 

  Qualitative  interviews  with  industry 

Benefits outweigh costs of regulation 

 

Costs  vs.  benefits  (quantitative  or 
where  not  possible  qualitative)  of  the 
implementation of the Directive. 

 

associations 
Follow  up 
respondents 

interviews  with  survey 

the 

costs 

regulatory 

What are  the  administrative  and  reporting 
burdens  on  stakeholders?  To  what  extent 
(including 
have 
reduced 
administrative  burden)  been 
through 
the 
Directive? 
What aspects of the Directive are the most 
efficient  or  inefficient,  especially  in  terms 
of 
that  are  mobilised  by 
stakeholders during the different phases of 
the process? 

implementation  of 

resources 

Reduction of administrative burden. 
The  extent  of  the  administrative  burden 
caused differs by target group 

 

Estimate  of  administrative 
before/after 
Directive 

implementation 

costs 
of 

Elements  of  the  Directive  can  be  ranked 
according  to  their  efficiency  in  terms  of 
resources required by stakeholders 

 

Resources required  
o 

for claiming interest of late 
payment  
for claiming compensation for 
recovery cost  
for recovery procedures for 
unchallenged claims  

o 

o 

How 
administrative burdens be reduced? 

regulatory 

could 

costs 

/ 

There are administrative costs imposed on 
stakeholders, 
authorities 
including 
implementing the Directive 

 

Estimated 
burden 
in 
procedures 
implementation of Directive 

level  of  administrative 
to  payment 
before/after 

relation 

  Desk research 
  Qualitative  interviews  with  industry 
associations and public authorities 
Follow  up 
respondents 

interviews  with  survey 

 

 

Ranking 
interviews  

based 

on 

qualitative 

  Qualitative 
authorities 
representatives  
Follow  up 
respondents 

 

interviews  with  public 
industry 

and 

interviews  with  survey 

Coherence  and  complementarity:  The  extent  to  which  the  intervention  does  not  contradict  other  interventions  at  EU  and  Member  State  level  with  similar  objectives  but 
complements them 
there  overlaps/ 
To  what  extent  are 
complementarities  between  the  Directive 
and  any  other  Community  or  Member 
State action in the relevant areas? 

The  Directive  does  not  overlap  with  other 
initiatives and complements them 

  Desk research to identify overlaps and 

interviews  with  public 

complementarities 

  Qualitative 

 

 

To  what  extent  have  Members  States 
made  use  of  the  possibility  to  maintain  or 

Member States have gone beyond or have 
fallen short of the Directive’s requirements 

 

(Degree  of)  complementarities  with 
other  policies  and  legislation  at  EU 
and national level 
Number of overlaps with other policies 
and  legislation  at  EU  and  national 
level 
Share of Member States which have 
gone beyond the Directive’s 

 

authorities and industry associations  
Follow  up 
respondents 

interviews  with  survey 

  Desk research to identify the effects of 
recent changes and best practices 

124 

 
 
 
 
Evaluation of Late Payment Directive 

Evaluation Questions 
bring into force laws and regulations which 
are  more  favourable  to  the  creditor  than 
the provisions of the Directive? 

To  what  extent  could  complementary 
measures  improve  the  positive  effect  of 
the Directive on the issue of late payment, 
and what measures would these be? 

Judgment criteria 

Indicators 

requirements 

Main Data collection tools and sources  
interviews  with  public 
  Qualitative 

There  are  additional  measures  that  could 
be  taken  to  enhance  the  effectiveness  of 
the Directive 

 

 

Complementary/voluntary initiatives 
in place 
Reduction/changes in payment 
durations in MS with complementary 
measures in place 

 

 

interviews  with  survey 

authorities and industry associations 
Follow  up 
respondents 
States 
Examples 
obtained  through  desk  research  and 
qualitative 
interviews  with  public 
authorities, and industry associations 

from  Member 

Relevance: The extent to which the intervention’s objectives are pertinent to the needs, problems and issues identified 
To  what  extent  do  the  objectives  of  the 
legislation  still  correspond  to  the  needs  of 
the stakeholders? 

Late  payments  still  remain  an  important 
issue  after  the  adoption  and/or  new 
challenges  have  come  up  since  adoption 
of the Directive.  

 

 

To  what  extent  are  the  rights  in  the 
Directive  exercised  by  stakeholders,  in 
particular SMEs? 

The  rights  laid  down  in  the  Directive  are 
regularly/frequently  exercised  by  industry 
stakeholders, including by SMEs 

 

 

 

Industry awareness of the rights laid 
down in the Directive 
Change  in  industry  needs  since  the 
impact assessment 
Average  payment  duration  following 
the Directive (trend) 
Industry  awareness  of  the  rights  laid 
down in the Directive 
Number 
claiming 
interest  rate  and  compensation  for 
recovery costs 

companies 

of 

Survey with companies  
European Payment Index 

 
 
  Qualitative  interviews  with  industry 

 

interviews  with  survey 

associations 
Follow  up 
respondents 
Survey with companies  

 
  Qualitative  interviews  with  industry 

 

associations 
Follow  up 
respondents 

interviews  with  survey 

EU Added value: What is the added value of the Directive? Is the EU level the most appropriate one to address the needs of stakeholders? 
Could the Directive’s objectives have been 
achieved  without  EU  intervention?  What 
would  be  the  most  likely  consequences  of 
stopping or repealing this Directive? 

  Development  of  cross-border  trade 
Directive’s 

before/after 
implementation (see above) 

  Degree  of  variation  between  Member 

the 

  Desk research 
  Qualitative interviews industry 

State law implementing the Directive 

Facilitation of cross-border trade 
Harmonised  legislation  across  member 
states 
Support to integration of internal market  
The application of Member State law (and 
not EU law) would not produce the desired 
results 

associations 

125 

 
 
 
 
 
 
 
 
 
 
 
 
E
T
-
0
4
-
1
5
-
8
7
5
-
E
N
-
N

126