COMPANIES should take a stand against debt and use the law to take action against persistent late payers, a leading North-East law firm has advised.

Dickinson Dees, which has offices in Newcastle and Stockton, said it was unacceptable for businesses to wait for months before being paid, and said laws were in place to help protect against late payment.

Jonathan Blair, partner at the firm which employs more than 800 people in the region, called on companies to invoke the Late Payment Act to force creditors to settle outstanding bills.

"The UK was one of the first countries in the European Union to introduce late payment legislation to help promote a culture of prompt payment, but many businesses are still unaware that where commercial debts are paid late and where no contractual right to interest exists between the parties, a claim can still be made for interest," he said.

Businesses, including charities, are entitled to claim interest for late payments for all commercial business-to-business and public sector transactions, including dealings with sole traders, trusts and corporate bodies.

Interest can be claimed at the Bank of England's base rate, as of the day the interest began to accrue, plus eight per cent.

A compensation charge of between £40 and £100 can also be claimed.

"Payment can be claimed in line with terms and conditions existing between the parties, or where contractual terms do not make provision for interest, interest becomes due under the Late Payment Act after any period of credit agreed between the parties has ended," said Mr Blair.

"It doesn't matter how large or small the debt is, if it remains due, you can claim interest.

"And in many cases, the threat of additional costs is enough to prompt payment from debtors."

Dickinson Dees has produced a Debt Recovery Solutions guide, which offers advice to companies on how to claim owed money.

For details contact Mr Blair on 0191- 279-9219.