My invoice remains unpaid – am I too late to issue legal proceedings?

This question was recently examined by the Court of Appeal in the case of Consulting Concepts International v Consumer Protection Association [2022] EWCA Civ 1699.  In this case, the Court of Appeal confirmed the principle that a creditor’s right to take action against a debtor (and the point at which the clock starts ticking) arises when the creditor, as supplier, has delivered the relevant goods to the debtor or the relevant services have been provided in accordance with the sale contract. The right of action does not, as is often believed, arise when the creditor raises an invoice. The invoice is merely a statement of what the creditor considers is owed by the debtor.

If the sale contract stipulates a credit period (say, 30 days from month end) then all that means is that the parties have agreed when an invoice must be paid. For the purposes of the limitation period, the clock does not start ticking from the end of the credit period but from the point in time when the creditor is entitled to be paid for the supply of goods or services.

Consulting Concepts provided services to the Consumer Protection Association (CPA). In accordance with the contract, invoices were submitted to the CPA for services provided with payment due on 90-day terms. The invoices were not paid and, six years later, Consulting Concepts issued legal proceedings.

The CPA applied to strike out the legal proceedings arguing that more than six years had elapsed so Consulting Concepts was out of time.

What did the court decide?

Practical implications

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We have a team committed to collecting debts in various sectors who will be able to advise on supply agreements, when limitation periods start and of course take the appropriate action to recover your debts.

If you want to be ahead of the game, we also have the expertise required to review your contracts and agreements and offer our opinion as to the validity of a clause delaying the limitation countdown from starting or if you lack such a clause, we can help you draft one.