CONTRACTS, ENGLAND AND WALES CONTRACTS, NORTHERN IRELAND Citation, commencement and extent 1 1 These Regulations may be cited as the Late Payment of Commercial Debts Regulations 2002 and shall come into force on 7th August 2002. 2 These Regulations extend to England and Wales and Northern Ireland . Amendments of the Late Payment of Commercial Debts (Interest) Act 1998 2 1 The Late Payment of Commercial Debts (Interest) Act 1998 shall be amended as follows. 2 Section 2(5)(c) and (6) (the Secretary of State’s power to specify by order categories of contracts as excepted contracts) are repealed. 3 Section 3(4) and (5) (debts not to carry statutory interest if specified in an order made by the Secretary of State) are repealed. 4 After section 5, there shall be inserted the following section— Compensation arising out of late payment 5A 1 Once statutory interest begins to run in relation to a qualifying debt, the supplier shall be entitled to a fixed sum (in addition to the statutory interest on the debt). 2 That sum shall be— a for a debt less than £1,000, the sum of £40; b for a debt of £1,000 or more, but less than £10,000, the sum of £70; c for a debt of £10,000 or more, the sum of £100. 3 The obligation to pay an additional fixed sum under this section in respect of a qualifying debt shall be treated as part of the term implied by section 1(1) in the contract creating the debt. Proceedings restraining grossly unfair terms or practices 3 1 In this regulation, “representative body” means an organisation established to represent the collective interests of any enterprise, either in general or in a particular sector or area. 2 Paragraph (3) applies where a person acting in the course of a business enters (or intends to enter) as purchaser into a contract to which the Late Payment of Commercial Debts (Interest) Act 1998 applies. 3 On the application of a representative body, the High Court may grant an injunction on such terms as it thinks fit restraining the person from relying on a term in the contract, or engaging in a practice in relation to the contract, where that term or practice relates to— a the date or period for payment of a debt; b the right to interest for late payment of a debt; or c compensation arising out of late payment of a debt; and in all the circumstances of the case that term or practice appears to the High Court to be grossly unfair. Revocation 4 The Late Payment of Commercial Debts (Interest) (Legal Aid Exceptions) Order 1998 is hereby revoked. Saving for existing contracts 5 These Regulations do not affect contracts made before 7th August 2002. Review 6 1 Before 26th February 2022, and subsequently at intervals not exceeding five years, the Secretary of State must— a carry out a review of regulation 3; b set out the conclusions of the review in a report; and c publish the report. 2 In carrying out the review the Secretary of State must, so far as is reasonable, have regard to how Article 7(5) of Directive 2011/7/EU of the European Parliament and of the Council of 16th February 2011 on combating late payment in commercial transactions is implemented in other member States. 3 The report must in particular— a set out the objectives intended to be achieved by regulation 3; b assess the extent to which those objectives are achieved; and c assess whether those objectives remain appropriate and, if so, the extent to which they could be achieved with a system that imposes less regulation. Nigel Griffiths Parliamentary Under Secretary of State for Small Businesses, Department of Trade and Industry