top of page
  • Anthony Browne

The importance of a recoverable clause

Often we are asked by our clients and potential clients if we can recover our fees and costs directly from their debtor. So today, we will highlight when and how you can do this and how to protect your business. Under the Late Payment of Commercial Debts Act you can recover "reasonable" debt collection costs incurred by your business. I mention "reasonable" as ultimately this could be a decision for a judge to decide and quite rightly an inordinate amount is not going to sit well with the courts. The Late Payment of Commercial Debts Act will only allow you to recover costs if both you and your debtor are a business. The act also sets out how much you can charge for each invoice defaulted. So what if your customer or debtor is an individual? Well there is no statutory law which will cover you but contractually you can still enforce the same notion within your original contract or terms of business. But, it has to be agreed from the outset, adding it to an invoice is too late. By adding the clause to your contracts and/or terms and conditions this allows us as your appointed debt collection agency to add our 15% commission to the debt balance. Although we still charge upon collection of the original debt, we will work our hardest to recover all costs and have even been successful recovering costs after taking debtors to court. Leverage This then gives your business fantastic leverage at the end of your credit control cycle or once you have had enough chasing the debt by telling your debtor that your next step is to instruct Westbury Collections Ltd and if you do that, they will then incur an additional 15% on top of what they already owe. This leverage can be used under both Statutory Law for business to business debts under the Late Payment of Commercial Debts Act and under contractual law once you insert a recoverable clause. Clause Today, we are giving the clause away for free on our website as well as a breakdown of costs you can charge on each invoice.

Anthony Browne

Westbury Collections Ltd

464 views0 comments

Recent Posts

See All


bottom of page