The Commercial Payments Bill, popularly known as the Small Business Protections Bill, has cleared committee staged in the Lords and is now at report stage. Assuming it survives largely intact, it will become the Commercial Payments Act 2026.

The headline measures have been well discussed. Payment terms capped at 60 days (or 30 days where the customer is a public body). Statutory interest at 8% over base, which can no longer be contracted out of, along with the fixed compensation sums that go with it. A ban on retentions in construction phased in over two years. A penalty on customers who raise invoice queries too late in the day. And a Small Business Commissioner able to investigate persistent poor payers and fine them.

Most of the commentary has focused on the fines. However, for anyone trying to recover money, they are arguably one of the least useful things in the Bill.

Fines punish, but they don’t pay you

The Commissioner’s new powers are narrower than the headlines might suggest. The Commissioner can order a late paying business to rewrite its standard terms, to stop using particular terms, and to retract misleading claims about his payment record. It can order them to retrain staff and tell suppliers what an investigation found too. But what the Commissioner can’t do is order it to pay your invoice.

Nor do the fines find their way to claimants. They are levied for a pattern of behaviour, rather than any individual debt – the money goes to the public purse. So, while a stronger commissioner will make late payments more costly and more visible for the businesses that do it, it won’t recover your debt.

The real change is adjudication

The measure that could make a practical difference in recovery is a new adjudication scheme.

Only the supplier can start the process, and a customer cannot contract out of it – any clause that tries to do so is automatically void. An adjudicator decides what is owed, gives written reasons, and sets a date for payment. That decision binds both sides straight away and the sum becomes recoverable as though a county court has ordered it.

A customer who wants to resist enforcement only has three limited arguments available: 1. that the adjudicator went beyond his/her remit; 2. that the process was fundamentally unfair; or 3. that enforcement would assist a fraud.

The model is conceptually similar to construction adjudication but tailored for general small businesses and run through a centralised public office rather than independent industry bodies. Once in place, it will provide a new route to recovering money.

Where the bill stops short

There are a number of areas where we’d argue the Bill has limitations as a tool for recovery.

• None of it is retrospective: The new rules apply only to contracts signed after they come into force, and the adjudication scheme is limited the same way. Everything currently sitting on your sales ledger will have to be recovered under the law as it stands today.
• The Commissioner can turn you away: Referrals can be refused for several reasons: the claim is deemed frivolous or it forms part of a larger dispute; proceedings are already underway or the case turns on a point of law better suited to a judge. In short, the straightforward debts will be adjudicated, but the awkward ones may come back to the routes we use now.
• Adjudication is not necessarily the end of it: An adjudicator’s decision holds until a court or arbitrator decides otherwise. This means a determined customer can pay up and then litigate it later. It is a cash flow remedy rather than a final determination (again, similar to construction adjudication).
• Someone still has to bring the claim: Only the supplier can refer, and nothing obliges them to. Suppliers have been entitled to claim an additional sum at 8% over base since 1998 but rarely do, because invoking this mechanism against your largest customer isn’t always the route to take. A new adjudication route does not change that commercial calculation.

Which remedy fits the debt

The Bill opens up more ways to pursue a debt, but it does not tell you which one a particular case needs.

Where debt is genuinely undisputed, insolvency procedures – a statutory demand and, if necessary, a winding-up petition – will often produce faster payments than anything else, because the consequences for the debtor are immediate in a way that a court claim form is not. However, aimed at a debt that is properly disputed, these same tools could be an expensive mistake. Knowing which situation you’re in, and whether adjudication, insolvency, or court proceedings fit it best, requires expert advice.

That is where our debt recovery team comes in. We have been highly ranked by Legal 500 for many years, while Chambers 2026 has again recognised our litigation prowess. Solomonic’s Year in Review placed Pannone Corporate second nationally in the 2025 Insolvencies and Companies List by volume of winding up petitions issued.

We act for the likes of DHL, L’Oreal, Hilti, ISS, PRS for Music, and leading debt collection agency, Control Account, alongside a large number of SMEs – many of whom we’ve advised for more than 25 years. These businesses trust us to collect their debts efficiently, effectively and ethically.

The Bill certainly gives suppliers stronger rights than they’ve had in a generation. However, it doesn’t direct them on how to use those rights, and that nuanced decision is usually where the money is won or lost.

The insolvency and debt teams at Pannone Corporate have featured highly in the latest Insolvencies and Companies List, according to the latest Solomonic Year in Review.

The teams ranked second in the top insolvency law firm list, based on the volume of claims issued in 2023. Collectively, 260 claims were issued by Pannone Corporate, ahead of the likes of Irwin Mitchell, Shoosmiths and Weightmans.

Daniel Clarke, insolvency and restructuring partner at Pannone, commented: “Given the current economic climate and the challenges facing businesses across England and Wales, it’s unsurprising to see such high volumes of claims going through the High Courts, with the Pannone teams contributing significantly to those claims numbers.”

Paul Jagger,  Head of Debt Recovery at Pannone, added: “We have invested in experienced and fresh talent to strengthen our proposition in both teams. This, coupled with our bespoke case management system, allows us to be perfectly placed to deal with high volume petitions, achieving excellent results for our clients.”

The annual High Court commercial litigation data report looks at key trends and analytics on the claims issued in the civil courts of England and Wales over a 12 month period.

In 2023, more than 7,500 claims were issued, with an 86% increase in insurance-related claims driven by aircraft leasing and Covid-related disputes.

The report states that ‘geopolitical, pandemic and economic events loomed large over English High Court litigation in 2023’, with winding up petitions continuing to drift upwards through most of the year, peaking in September.

Pannone Corporate has been recommended as top tier in two practice areas and also recommended in a further ten practice areas in The Legal 500 2024 edition released yesterday.

Here are some highlights from what our clients had to say:

Commercial litigation 

“Direct partner contact, in-depth subject expertise and competitive rates due to its size and structure which makes it stand out in the Manchester and national market.”

“Pragmatic yet thoroughly detailed advice together with responsiveness and quick turn-around times – an invaluable resource for a busy in-house team.”

“Collaborative, responsive, thoughtful and with a deep knowledge and understanding of our business.”

Commercial property

“The team is very experienced and offers a personalised service. They are highly knowledgeable and able to represent the core interests of their clients without prompting.”

“A smaller team that offers a big company service and an ethos personalised to the needs of the client.”

“Valued members of their team and ours. They are always available and ready to answer quick questions and give advice.”

Contentious trusts & probate

“Sound, intelligent advice and support.”

“Exceptional advice and persuaded me to agree to mediation. This proved to be excellent advice and helped achieve a fantastic result, avoiding court costs.”

“Client-focused and provide realistic straight-talking advice in a manner clients can easily understand. They are very experienced around the legal issues but also have their eye on costs.”

Corporate & commercial

“Able to manage demanding and challenging stakeholders – always with a smile on their faces.”

“Highlights risks in a commercial manner. Doesn’t labour incidental points, a characteristic that helps keep processes moving and on track.”

“Always has a solution when required to get through a log-jam and able to manage diverse stakeholders to ensure a consensus solution is found.”

Debt recovery

“Pannone are very good at replying and explaining their process. We can call them anytime and they pick up – not the case with other firms.”

“The personal touch and the relationships with people at Pannone. They have held inhouse training at their Manchester office to help myself and my staff understand the legal process.”

Employment

“Supported several very complex cases and always quick to respond, giving excellent and considered advice. They understand our business and some of the difficulties we face and apply this when giving advice.”

“‘We have built a strong relationship with the whole team and no matter what the issue, any of them can be approached and you can trust that if it is not their area of expertise they will liaise with the subject expert within the team before providing advice.”

“Their employment law knowledge is fantastic, and they present this in a simple yet effective way.”

Health & safety

“An outstanding partner to myself and the whole business. Nothing is too much trouble.”

“Undoubtedly the firm to watch in the North West, buckets of experience mixed with in-depth knowledge of the regulatory landscape means the firm is going from strength-to-strength.’

“The class act of the North’

Insolvency & corporate recovery

“A very commercially sound and technically gifted team who provide an excellent service.”

“Excellent technically and commercially, and fun to work with.”

“Strong technically, very commercial, results-orientated and well-respected in the market.”

“A good communicator and always willing to take a commercial view.”

Intellectual property

“Pannone have kept up with us every step of the changes in our organisation, and their diligent handling of our cases has played a significant part in our organisation’s success post-pandemic. They are consistently a pleasure to deal with – no matter the query or the request, the team work tirelessly to meet our expectations.”

IT & telecoms

“Adept at providing commercial and pragmatic advice which comes from being experts in the sector.” 

“Manages to provide the right level of advice for our business without over-engineering it.”

Media & entertainment 

“Highly professional, supportive and excellent advice”

“An ability to see around corners…always my first choice.”

Property litigation

“A very cohesive and proactive team, which is essential to support our sometimes urgent and time-critical requirements.”

Notable individuals

Hall of Fame

Melanie McGuirk – Intellectual Property

Tim Hamilton – Corporate and Commercial

Leading Individuals

Amy Chandler – Intellectual Property

Amy Chandler – IT and Telecoms

Nicola Marchant – Contentious Trusts and Probate

Paul Jonson – Commercial Litigation

David Brown – Property Litigation

Melanie McGuirk – Media and Entertainment

Jack Harrington – Employment

David Walton – Health and Safety

Next Generation Partners

Gemma Staples – Property Litigation

Jonny Scholes – Contentious Trusts and Probate

Rising Stars

Sarah Bazaraa – Intellectual Property and Media & Entertainment

Arshnoor Amershi – Corporate and Commercial

Andrew Walsh – Corporate and Commercial

Pannone Corporate – the North West/Manchester [change for regionals] law firm – has bolstered its  debt recovery team with the appointment of Paul Jagger.

Paul, who joins from Ward Hadaway as Debt Recovery Manager, has 15 years’ experience in the sector, having previously worked at Turner Parkinson. Paul will work alongside Head of Debt Recovery, Karl Williams, in growing the team and its national client base, which includes DHL, L’Oreal and Manchester City Council.

Paul Jonson, senior partner at Pannone, said: “We’re delighted to welcome Paul to firm, as we look to strengthen our debt recovery team over the coming months in key sectors, such as the debt collection industry, recruitment and retail, where Paul has significant experience.

“Paul has a fantastic track record of building and implementing industry-leading systems to enhance client services and we’re confident his knowledge of the market and practical experience will lay the foundations for future growth.”

His arrival follows the appointment of a raft of legal professionals to the firm. These include: Dominic Beddow, solicitor in Real Estate; Lauren Whittaker, Foreign Lawyer, Regulatory; and Belinda Cheung, Associate, Corporate.

Paul commented: “The opportunities and potential that exist at Pannone Corporate are very exciting and the prospect of being able to make my mark on the team, in terms of how we work and the technology we utilise, was too good to turn down.”

Commenting on the sector, he said: “The world we live in is constantly changing and the future direction of the debt recovery market is very difficult to predict. Creditors are seeing an increase in collection activity for already stretched credit control teams. It’s our job, with experience and system efficiencies, to provide cost-effective relief for creditors, while ensuring that those struggling businesses that are committed to paying are dealt with fairly.”

As a business, no matter the size, it is vital that you are paid what is owed to you by customers and clients. Late payments or avoiding payment altogether for goods and services is an issue for a lot of our clients.  Non-payment can be incredibly challenging for your cash flow, and therefore, have a detrimental impact on your business in the long run.

Managing your debtors effectively is key for any business.  We set out below a number of steps you should take to effectively manage your debtors.

The Debt Recovery Process Explained

Invoice

Whether they have been sent previously or not, each request for payment needs to be accompanied by the relevant invoice and purchase order (if appropriate). This works as the paper trail should you need to subsequently escalate the matter.  Prior to the first invoice, you and your customer should have agreed upon payment terms. These payment terms should specify exactly when they need to pay, and what will happen if they don’t.

Reminder

If after invoicing you have not received payment it is important to chase the customer. Sometimes emails do get lost or are overlooked.  The debt recovery process of sending reminders could either involve sending further emails or chasing up via a phone call. We suggest keeping a note of the call on the file.  If the customer is ignoring your calls, keep a note of when you rang as you might need to refer to it subsequently.

Withhold Work?

If payment is being withheld for any length of time without reason, you should consider whether you ought to stop any further work for this customer.  You may not be able to stop work immediately (due to the nature of the contracted relationship) or you may have a longstanding relationship which makes it difficult to stop work however you need to bear it in mind, at least as a threat. In many instances, this is likely to work as the other business may suffer without the services that you are providing them.

If this doesn’t work, then seeking other forms of resolution must become your next step without delay.

Final Notice

A final notice, in all likelihood, is maybe the last correspondence that you send to a customer in the debt recovery process prior to taking action against them. This should outline a time period or deadline in which to pay the amount due including interest and any further costs or expenses that may be due. In many cases, the customer will respond to a final notice.

However, if the final warning is not successful, then you need to consider legal action.

Legal Action

When it comes to legal action in the debt recovery process, you have two options – legal proceedings or the insolvency route.  There are advantages and disadvantages to both options and we can guide you through the choices. At Pannone Corporate, protecting your business is important to us.

We have years of experience in looking after the legal needs of a wide range of clients; including many household names such as Boohoo.com, DHL, Iceland Frozen Foods and L’Oreal.  Our debt recovery team can help you to successfully recover business to business debts and can be contacted at our Manchester office on 0800 131 3355 or via the contact form.

Cash flow plays an integral part to the smooth running of your business. So, when customers fail to pay your invoices on time or at all, it can have a significant impact on cash flow and the financial health of your business. To resolve this, you may have to begin the debt recovery process to recoup your debts.

However, the commercial debt recovery process can be a costly and time-consuming exercise. In some cases, the costs may equal if not exceed the debt. It is therefore important to have a system in place to ensure that customer debts do not accrue.

Credit Checks

Before you enter into a contract with your customer, it’s always recommended that you carry out a credit check. A credit check is a simple and effective way to assess the financial behaviour of your customer. It gives you an insight into their credit history, showing you information that could influence your future business with them, such as whether they have a history of late payments. If a customer has a bad credit rating you can consider implementing measures to minimise the risk of non-payment.

Director Guarantees

Another way you can avoid the commercial debt recovery process is to consider whether it is necessary to obtain personal guarantees from the directors of your corporate customers. This would help to secure the financial obligations of the company. Additionally, it sets in stone something they will be required to uphold.

Prepayment

Obtain prepayments from your customers to ensure that you are paid in a timely manner and that you are guaranteed payment for part of your services. They should be obligated to pay on a specific date, usually every month or quarter. This guarantees payments to help with your cash flow.

Customer ‘Stop List’

To prevent customers from accruing further debt implement a ‘stop list’. This list should prevent persons within the organisation from providing further services to customers who are overdue on their payments. This should act as an incentive for customers to pay on time if they wish to receive the services you can offer them.

Terms & Conditions

Ensure that you have robust terms and conditions in place. These should clearly set out the customer payment obligations and your rights in the event that the customer defaults on payment. This should help in future instances when the commercial debt recovery process may be necessary.

Should you require assistance with your debt recovery process please contact Pannone Corporate on 0800 131 9000.