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.