If you supply another business and they pay late, you have a statutory entitlement to interest and to fixed compensation. It arises automatically, without a reminder, without prior notice, and without appearing anywhere in your contract or on your invoice. Most Irish suppliers do not know this.
What the Entitlement Is
Under the European Communities (Late Payment in Commercial Transactions) Regulations 2012, as amended, it is an implied term of every commercial transaction that where the purchaser does not pay by the relevant payment date, the supplier is entitled to statutory late payment interest at the ECB reference rate plus eight percentage points, unless the contract otherwise provides. Separately and in addition, there is automatic fixed compensation for recovery costs with no need to prove any costs were incurred: €40 where the debt is under €1,000, €70 between €1,000 and €10,000, and €100 above €10,000 — plus reasonable compensation for recovery costs exceeding that fixed sum, which can include the cost of instructing a lawyer. The regulations apply to commercial transactions in both the public and private sectors and not to consumer transactions. These rates and figures are set by statutory instrument, have been amended before, and should be confirmed as current before being relied on.
Why Nobody Claims It — and When You Should
Commercial caution, rationally enough: a supplier weighing a modest interest entitlement against a valuable customer relationship protects the relationship. The problem is that this becomes a default rather than a decision, so the entitlement goes unused even in the situations where there is nothing left to protect. Three moments when it is worth claiming. When the relationship has ended — there is no customer to lose, and this is simply money you are owed. When recovery has already reached a solicitor, because you are already in a formal process and the interest and compensation form part of what is claimed. And when a customer is chronically late, where the point is behavioural rather than financial: telling customers that future late payments will attract statutory interest and compensation frequently changes payment behaviour without any claim ever being made. Note also that the entitlement does not depend on having been asserted at the time, so a payment history is worth reviewing — subject always to the ordinary limitation position. And check your payment terms while you are at it: in B2B contracts a period exceeding sixty days must generally be expressly agreed and must not be grossly unfair to the supplier, so the extended terms buried in a large customer’s standard conditions are not automatically effective.
Check your own terms of trade too. Many businesses have a contractual interest entitlement they never invoke, sitting alongside the statutory one. Reviewing your terms costs nothing and occasionally reveals that you have been entitled to more than you have been claiming for years.
The full page is here, or ring 01 5827148.
Richard O’Shea — Solicitor
Solicitor at Mary Molloy Solicitors, established 1981, with offices at The Ormond Building on Ormond Quay — a short walk from the Four Courts. The firm advises creditors on recovery and enforcement, and, in separate matters, advises debtors who have received demands or proceedings. It is a law firm and not a debt collection agency: fees are agreed in writing at the outset and are never calculated as a percentage or proportion of what is recovered. 01 5827148 · richardoshea@marymolloysolicitors.com · LinkedIn
General information, not legal advice. This website contains general information about Irish law on debt recovery and enforcement. It is not legal advice and does not create a solicitor—client relationship. Every debt turns on its own facts — the documents, the dates, the parties and the debtor’s circumstances — and advice on yours requires a consultation. Statutory thresholds and figures referred to on this site are subject to change and should be confirmed before any step is taken.
A law firm, not a debt collection agency. Mary Molloy Solicitors provides legal advice and representation. It does not operate as a debt collection agency and does not conduct collection campaigns. Fees are agreed in writing with the client at the outset and are never calculated as a percentage or proportion of any sum recovered. In contentious business, a solicitor may not calculate fees or other charges as a percentage or proportion of any award or settlement.
No outcome is promised. Nothing on this site states or implies that any debt will be recovered, that any asset will be found, that any enforcement step will succeed, or that any claim will succeed. Recovery depends substantially on the debtor’s means, which are frequently unknown at the outset.
How payment may be demanded is regulated. Section 11 of the Consumer Credit Act 1995 makes it an offence to make a demand for payment by means calculated to cause alarm, distress or humiliation, or falsely to represent that legal proceedings have been or will be issued. Nothing on this site should be read as encouraging any such conduct. Mortgage arrears on a principal private residence are dealt with under a separate regulatory framework and are outside the scope of this site.
If you are the person being pursued. Free, confidential and independent money advice is available in Ireland from MABS, the Money Advice and Budgeting Service, and through the Abhaile scheme for people in mortgage arrears. You do not have to engage a solicitor to get help, and taking advice early generally improves the options available. This firm advises debtors in matters separate from those in which it acts for a creditor, and never both sides of the same debt — conflicts are checked before any substantive discussion.
Tax. Nothing on this website is tax advice. Questions about VAT on recovered sums, bad debt relief or the treatment of write-offs belong with your accountant or tax adviser and with Revenue’s own guidance.