How to counteract delays in commercial transactions?
The fact that customers do not pay on time is – unfortunately – nothing new. The legislature has been trying to combat unreliable contractors for years, as evidenced, among other things, by the Law of March 8, 2013. on preventing excessive delays in commercial transactions and its subsequent updates.
It is this piece of legislation that provides creditors with compensation for collection costs, as well as reimbursement for recovery costs incurred in excess of the compensation amount. How does it work in practice?
Compensation for recovery costs – how to recover min. 40 euros in compensation?
Art. 10, para. 1 of the aforementioned law says that the creditor is entitled to compensation equivalent to the amount:
- 40 euros – when the value of the cash benefit does not exceed PLN 5,000,
- 70 euros – when the value of the monetary benefit is higher than PLN 5,000 and amounts to a maximum of PLN 49,999,
- 100 euros – when the value of the monetary benefit is equal to or greater than PLN 50,000.
Important!
The creditor is entitled to compensation without having to send a summons for payment, and acquires this right with the expiration of the due date.
How do I calculate the correct amount of compensation I am entitled to?
The equivalent amount of compensation can be calculated by taking into account the value of the average euro exchange rate announced by the National Bank of Poland on the last working day of the month preceding the month in which the monetary benefit became due.
Example
Ms. Lidia wants to calculate the amount of compensation due to her for an invoice that was due on April 14, 2024. To do this, he checks the average exchange rate of the euro published by the National Bank of Poland as of March 29, 2024 (this was a Friday, and therefore the last working day of the month). The rate was PLN 4.30, while the value of the cash benefit at issue was PLN 12,453.
Ms. Lidia is entitled to compensation equivalent to 70 euros, or – after applying the accepted exchange rate – 301 zlotys.
Compensation vs. real recovery costs
The compensation referred to in Art. 10 pts. 1 of the Law on Prevention of Excessive Delays in Commercial Transactions, is not intended to punish debtors – it is merely a kind of flat fee to discipline contractors and encourage them to pay on time. It is particularly important in the case of low-value transactions – having to pay 40 euros in compensation for a delay in a transaction valued at less than a few hundred zlotys can be painful.
For the reasons mentioned above, the creditor does not have to prove in any way that he actually incurred recovery costs. Even if the costs incurred are less or none, he can exercise his right to compensation. It also does not have to take the case to court for this purpose, but only inform the debtor of the need to pay the additional amount.
Important!
Compensation for recovery costs applies only to commercial transactions, i.e. contracts for the delivery of goods or services against payment, which the parties conclude in connection with their business activities. In practice, this means that it cannot be charged for transactions with consumers.
Reimbursement of recovery costs in excess of the compensation due
What if the collection costs actually exceeded 40, 70 or 100 euros? And the answer to this will be found in the law:
In addition to the amount referred to in paragraph 1, the creditor is also entitled to reimbursement, in a reasonable amount, of the recovery costs incurred in excess of this amount.
We can include in the costs of debt collection any costs generated by attempts to contact the debtor (phone calls made, registered letters sent), and even travel to the site if we decide to deliver the summons for payment in person (for example, when the counterparty does not respond to previous attempts to contact him). A separate issue is the cost of litigation – if you decide to go to court, the costs increase dramatically, but with them also the chance of recovery.
For more on debt collection, see our guide: Effective debt collection, or how to recover debts?‘
Compensation versus litigation
Compensation does not always pay off for the creditor. One such case is when an entrepreneur who is waiting for a debt to be paid is about to go to court anyway. This involves a court fee of 1.25% of the value of the debt. If the entrepreneur decides to exercise the right to compensation, the amount will have to be counted as part of the value of the debt, which will make court fees increase.
That’s not the end of the story, because if you win the case and get a court order for payment, the compensation will be deducted from the legal costs. In other words: if the value of the compensation applied is less than the total value of the court fees (and the cost of legal representation), the creditor will not be able to count on any compensation.
Compensation out of court
It is far more advantageous to claim compensation out of court. There is then no need for court fees – simply add the value of the compensation due (40, 70 or 100 euros) to the amount owed.
Compensation for multiple invoices
Like many other regulations, the one under discussion regarding compensation is not sufficiently specified. This leads to situations like the one described in the Dziennik Gazeta Prawna article, in which an entrepreneur decided to claim compensation for each of the eleven invoices that his counterparty paid late. Adding fuel to the fire was the fact that the total value of the invoices was PLN 2,137.74, and the accrued compensation was PLN 1,859.38.
In this situation, the Elbląg court dismissed the claim in its entirety, explaining its decision by the provisions of the Civil Code regarding abuse of subjective rights.
This does not mean, however, that if multiple invoices remain unpaid by a single counterparty, compensation can absolutely only be charged once. Much depends on the specific elements of the transaction. In the case of the aforementioned case, the court’s decision was also influenced by the fact that the parties to the contracts ended their cooperation fifteen months before the lawsuit was filed for unpaid compensation. It was also important that the creditor could thus look for a way to enrich himself, rather than compensate for his losses.
It seems that in this – as in many other matters – it is worth relying not only on the letter of the law, but also on common sense. This brings us back to the purpose of compensation – it is to encourage contractors to pay on time, not to punish them or create opportunities for creditors to make money.
Summary
Compensation for recovery costs is a mechanism that allows a business to recover recovery costs without having to prove that it actually incurred them. It also helps increase the chances of avoiding the court route – the assumption is that the debtor, upon learning of the compensation charge, will pay the amount due plus the added amount, and will be more diligent in the future. However, this is only theory, and in practice it may turn out that filing a lawsuit will be – unpleasant, but nevertheless – a necessity.
However, it is worth remembering that if the costs of collection exceed the amount of compensation, the creditor does not lose the right to reimbursement of the costs incurred. On the contrary, the Law on Prevention of Excessive Delays in Commercial Transactions says explicitly. That the creditor is expected to recover the entire cost. In this case, however, justification is necessary, so he must be able to prove that he actually incurred these costs.
