Defra digs own hole in court loss

Agency must pay firms interest on unpaid fees

The government faces a £40 million payout to business following a landmark high court decision.

As a result, the Department of the Environment, Food and Rural Affairs (Defra) could face a long queue of contractors to which it will have to pay millions for their efforts in disposing of animal carcasses during the foot and mouth epidemic five years ago.

Harry Ruttle plant hire of Chorley, Lancashire, took Defra to court claiming the agency owed the firm £10 million plus costs and interest for digging disposal pits on farms during the foot and mouth outbreak.

The court sided with the Ruttles and ruled that Defra must pay over £1 million for the cost of the lengthy court hearing in London.

A recent late payment act allowing firms to charge interest on debts unpaid over excessively long periods of time means that Defra will also have to pay several million pounds on top of the court and contractor’s fees.

“We welcome this court judgement as it proves even officials of a government department cannot get away without paying their debts,” said Nick Goulding , chief executive of the Forum of Private Businesses (FPB).

“This case was only the tip of the iceberg where Defra refused to pay a host of contractors for legitimate work they carried out during the food and mouth outbreak.”

Goulding said the FPB will now encourage other contractors under its wing to pursue Defra’s payment in the courts based off this precedent.

He said the FPB will encourage firms to claim 12% interest for all late payments, which means Defra faces having to pay out another £40 million.

Comments

(will not be published)