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Accounting - Invoicing
The statutory interest for late payment and the penalties for late payment cannot be cumulated
Publié le 15 mai 2024 - Directorate for Legal and Administrative Information (Prime Minister)
Late-payment penalties and statutory interest for late payment are identical in nature as they both repair the damage caused by late payment. So they can't be cumulative. The Court of Cassation said so in a ruling published in its April 24, 2024, bulletin.
One business is suing another business for unpaid bills. It wishes to obtain payment of penalties for late payment and statutory interest for late payment.
The Court of Appeal rejects the applicant business’s application. In its view, penalties for late payment and statutory interest for late payment cannot be cumulated on the ground that they are intended to compensate for the damage caused by late payment. The applicant business is appealing on a point of law.
The Court of Cassation dismisses the appeal. It maintains that the penalty for late payment constitutes interest on account of late payment and is therefore of the same nature as statutory interest on late payment.
Thus, despite their different conditions of application and legal regime, those two penalties are identical in nature in that they repair damage resulting from late payment. So they can't be cumulative.