A public authority will not pay your invoices: collect with interest

The case, in five lines

What is brought

Written payment claim under article 199 of the Public Sector Contracts Act and, if there is no answer within a month, a contentious-administrative appeal against the authority's inaction (article 29.1 LJCA, the Contentious-Administrative Jurisdiction Act), seeking immediate payment as an interim measure. If there was no valid contract, a claim for the value of the work done on the ground of unjust enrichment.

Before which court

If the debtor is a town council, a provincial council or another local authority, the contentious-administrative section of the Tribunal de Instancia (the first-instance court) for the area where the contracting body has its seat (articles 8.1 and 14.1 LJCA). If it is a regional government, as a general rule the Contentious-Administrative Chamber of the Tribunal Superior de Justicia (the regional High Court). The prior requirement of article 5 of Organic Law 1/2025, which belongs to civil and commercial proceedings, does not apply: the requirement here is the written claim.

Deadline

Under article 198.4 LCSP, the authority has thirty days from delivery to approve the work and another thirty from that approval to pay. Once the payment period has passed, you claim in writing and wait one month (article 199 LCSP). From the following day, article 46.2 LJCA gives two months to bring the appeal, although the claim may be repeated for as long as the inaction continues. What cannot be reopened is the four year limitation period in article 25 of the General Budget Act, which runs from completion of the service or from notification that the obligation has been recognised, and is interrupted by each written claim.

Who can bring it

Claimant: the contractor who performed the work or, if the debt was assigned, the assignee, provided the assignment was formally notified to the authority (article 200 LCSP). Defendant: the contracting authority. If the contract was signed by a municipal company that is not itself a public authority, the contract is private and recovery goes through the civil courts.

Financial risk

If the payment claim is upheld in full, article 199 LCSP requires the authority to be ordered to pay costs. If it is upheld in part, each side normally bears its own. If you lose, the court may order you to pay costs, although the law allows it to limit them to a portion or to a maximum figure. Below thirty thousand euros the judgment cannot be appealed: the case is won or lost at first instance.

Thirty days to approve the work and another thirty to pay

Article 198.4 of the Public Sector Contracts Act requires the authority to approve the works certificates, or the documents confirming that what was delivered or performed conforms to the contract, within thirty days of delivery, and to pay within thirty days of that approval. If it is late, from then on it owes late payment interest and compensation for recovery costs on the terms of Law 3/2004 on combating late payment. There is no need to ask for them for them to accrue.

These are two successive periods that add up: up to thirty days from delivery to approve the work and another thirty from that approval to pay, sixty in total. If approval comes sooner, the thirty days to pay start running from that day. If it never comes, the authority cannot delay interest by arguing that it never got round to checking the invoice: interest runs from the sixty first day after delivery.

The other half of the article is a burden on you. For interest to start running, the invoice must have been submitted to the proper administrative register, under the e-invoicing rules, within thirty days of delivery or performance. If you submitted it late, interest does not start until thirty days after correct submission. An invoice bounced by the platform because the code of the receiving body was wrong is not a submitted invoice: the clock starts with the one that is accepted.

The written claim is the requirement that opens the case

Article 199 LCSP sets out the route. Once the payment period has passed, the contractor may claim in writing from the contracting authority performance of the payment obligation and, where appropriate, the late payment interest. If the authority does not answer within one month, the payment period is deemed acknowledged as expired and the contentious-administrative appeal against inaction becomes available. It is a special, short period: for claiming any other specific performance, article 29.1 LJCA requires a three month wait; for payments under a contract, one month is enough.

In this jurisdiction the admissibility requirement of article 5 of Organic Law 1/2025 does not apply: a prior attempt at negotiation, mediation or conciliation is required in civil and commercial proceedings, not in contentious-administrative ones. What closes the door here is failing to claim in writing, or doing so so vaguely that the council does not know what is being asked. The claim must list the invoices with their number, registration date, amount and due date, the interest calculated to date and the forty euros for each, and it is filed through the electronic register, which gives it a certain date.

Two scenarios should be anticipated. If the council replies refusing or disputing the debt, there is no longer inaction but an express decision, and the ordinary time limits run against it: an administrative review (recurso de reposición) within one month, optional where the decision ends the administrative route, or a court appeal within two months. And if the contract was signed not by the council but by a municipal company that is not itself a public authority, article 199 does not apply: the contract is private, recovery goes to the civil section of the Tribunal de Instancia (the first-instance court), and there a prior attempt at an appropriate dispute resolution method is indeed required.

The appeal against inaction carries an almost automatic interim measure

The appeal is directed at inaction: the authority, bound by a contract to make a specific payment to a specific person, fails to do so (article 29.1 LJCA). If the debtor is a town council, a provincial council or another local authority, the case goes to the contentious-administrative section of the Tribunal de Instancia (the first-instance court) for the area where the contracting body has its seat, not where you are based: the rule allowing a claimant to sue at home is limited to state liability, public employment, special property regimes and penalties. If the debtor is a regional government, the case generally goes to the Contentious-Administrative Chamber of the Tribunal Superior de Justicia (the regional High Court).

What makes this route valuable is the interim measure. Article 199 LCSP allows immediate payment of the debt to be requested with the appeal and requires the court to grant it, unless the authority proves that the circumstances justifying payment are absent or that the amount claimed is not the amount due, in which case the measure is limited to the latter. The burden is reversed: you do not have to show that your company will collapse without the money; it is the council that has to show it does not owe it. Article 136 LJCA also allows the measure to be requested before the appeal under the urgency procedure, with the obligation to lodge the appeal and seek its confirmation within ten days of notification; otherwise the measure lapses and whoever requested it is liable for the damage caused.

Here lies the nuance that decides the strategy. The interim measure works when the debt is clear: approved invoices, approved certificates, a recognised obligation. If the council never approved the work and disputes that the service was properly performed, it will foreseeably object that the amount is not due, and the case becomes a dispute about performance of the contract. That is why the approved invoices, which go with the interim measure, are separated from the disputed ones, which require evidence. And a judgment upholding the payment claim in full orders the authority to pay costs: article 199 leaves no discretion.

The two months to appeal can be reopened; the four year limitation period cannot

Article 46.2 LJCA gives two months to challenge inaction, counted from the day after the waiting period expires. Many contractors believe that once those two months have passed they have lost the debt. That is not so: the Tribunal Supremo (the Spanish Supreme Court) has held that, for as long as the inaction continues, the claim may be repeated, and with it the time limits to appeal start running again. The prudent course is to appeal within the two months so as not to open that argument, but letting them pass does not extinguish the debt.

What does extinguish it is limitation. Article 25 of the General Budget Act sets four years, unless a special law provides otherwise: for the right to have an obligation recognised, counted from completion of the service or from when the right could be exercised, and for the right to demand payment of obligations already recognised, counted from notification of the recognition. That Act governs the central government's finances; regional finance laws set the same period and the courts apply the four years to debts of local authorities. Limitation is interrupted in accordance with the Civil Code: by a court claim, by an out of court claim from the creditor and by any acknowledgement of the debt.

There are two nuances almost nobody mentions. In works contracts, the Tribunal Supremo counts the four years to claim interest on the certificates from the final settlement of the contract, not from payment of each certificate: a builder paid late five years ago may still have a live claim if the settlement came later. Conversely, silence does not freeze the clock: the same court has held an interest claim time-barred even though the authority had rejected it by silence. Filing a letter and waiting years for someone to answer is the most common way of losing a claim against a public authority.

What you recover: principal, statutory late interest and forty euros per invoice

Article 198.4 refers to Law 3/2004 for interest and recovery costs, with the same mechanism as between businesses, explained in the guide on commercial late payment: interest accruing automatically on mere non-payment, at the European Central Bank rate plus eight points, set by half years (in 2024 and 2025 it ranged between ten and twelve and a half per cent a year), and a fixed sum of forty euros added to the debt in every case, plus any proven recovery costs above that. The Court of Justice of the European Union has held that those forty euros are due for each invoice paid late, even if they are all claimed together in a single claim.

Some things are not lost, whatever you may be led to believe. Accepting the principal without comment does not amount to waiving the interest: the Tribunal Supremo held in 2025 that the rule in article 1110 of the Civil Code, under which receipt of the capital without reservation extinguishes the interest, does not apply to the money obligations of public authorities. It has also rejected delaying accrual because the expenditure was awaiting validation: internal budget procedures cannot be used to postpone debts that are already due. That is why a company that was paid late can claim the interest on those delays today, within the limitation period.

What is lost is what you sign. Some authorities offer to pay sooner if the supplier waives interest and recovery costs, and that waiver is valid if freely given. Before accepting it you need to have calculated what you are giving up: on a debt one year old, interest has been around ten per cent of the principal in recent years, and the forty euros add up when invoicing is monthly. And once judgment is obtained, if the authority does not pay, article 106 LJCA allows enforcement to be sought after three months and the judge to raise the statutory interest by two points if a lack of diligence is found.

Invoices without a contract or with an audit objection: unjust enrichment has a price

A large share of municipal debts does not arise from a clean contract: verbal instructions, chains of minor contracts exceeding the limits, services that carried on after the contract expired without extension, invoices with an objection from the internal auditor. In those cases there is no approval to trigger article 198.4, and the authority tends to hide behind the lack of a contract or of budget. The usual administrative way out is an out of court recognition of the debt or an ex officio review of the irregular procurement, followed by settlement of what was supplied.

If the council does not do so, the value of what was supplied is claimed on the ground of unjust enrichment, and an express or silent refusal is challenged before the contentious-administrative courts. The Tribunal Supremo (the Spanish Supreme Court) accepts this route where the service did not arise on the private party's own initiative but from acts of the authority that reasonably led it to believe it had to perform it, and where there is no bad faith: the councillor's instruction, the officer's email requesting the service, the actual use of what was delivered. Moreover, the time limit for appeal does not run against a refusal by silence, as the Tribunal Constitucional (the Constitutional Court) and the Tribunal Supremo have held.

This route has a double price. First, what is recovered is restitution: the Tribunal Supremo held at the end of 2025 that compensation for works carried out outside a contract covers the costs actually incurred, but not overheads or industrial profit, which belong to a valid contract. Second, without a contract neither the Law 3/2004 interest nor the interim measure in article 199 applies automatically, since both presuppose a contract. That is why, when the council offers to regularise the debt, it is worth weighing with figures whether that regularisation pays you more than litigation would.

How we run the case, step by step

1. 1

   Sort the invoices by status

   Each invoice is classified: submitted in time and approved, submitted without approval, bounced by the platform, or with no contract behind it. Each group has a different route, and mixing them in a single claim weakens the strong invoices.

2. 2

   Calculate the debt to date, invoice by invoice

   For each invoice: delivery date, registration date, approval date, due date thirty days after it (sixty days after delivery if there was no approval), days late, applicable half-yearly rate and forty euros. That table is the annex to the claim, the basis for the interim measure and the argument if a waiver is proposed.

3. 3

   Claim in writing through the electronic register

   The article 199 LCSP claim is filed identifying the contract, the invoices, the principal and the interest. The filing receipt starts the one month wait and interrupts the limitation period.

4. 4

   Decide on the future of the contract

   If the delay exceeds four months, suspension may be notified with one month's notice; if it exceeds six, the contract may be terminated with compensation. The decision is taken with figures and in writing, because stopping without notice turns you into the party in breach.

5. 5

   Appeal against inaction with immediate payment

   Once the month has passed without reply, the appeal is lodged before the contentious-administrative section of the Tribunal de Instancia (the first-instance court), asking as an interim measure for immediate payment of the approved invoices. The disputed ones are supported with evidence of performance.

6. 6

   Enforce the judgment without waiting

   If the authority does not pay within three months of being notified of the final judgment, enforcement is sought under article 106 LJCA, with a possible two point increase in interest and, where appropriate, set-off against anything you owe it.

The law that applies

• Art. 198 LCSP. It requires the authority to approve what was delivered or performed within thirty days of delivery and to pay within thirty days of that approval, with late payment interest and recovery costs under Law 3/2004 if it is late. Interest requires the invoice to be submitted to the register within thirty days of delivery. A delay of more than four months allows suspension with one month's notice, and of more than six, termination with compensation. Regional governments may shorten those periods. BOE-A-2017-12902
• Art. 199 LCSP. Once the payment period has passed, the contractor claims in writing. If the authority does not answer within a month, the expiry is deemed acknowledged and an appeal against inaction may be brought seeking immediate payment as an interim measure, which the court grants unless the authority proves it is not due or that the amount due is lower. Upholding the payment claim in full entails an order for costs against the authority. BOE-A-2017-12902
• Art. 29 LJCA. Anyone entitled to a specific performance arising from an administrative provision, decision, contract or agreement may claim it and, if within three months the authority neither performs nor reaches an agreement, challenge its inaction. For public contract payments, article 199 LCSP reduces that wait to one month. BOE-A-1998-16718
• Art. 136 LJCA. In appeals against inaction, the interim measure is granted unless it is evident that the situation does not apply or that it would seriously harm the public interest or third parties. It may be requested before the appeal, which must then be lodged seeking its confirmation within ten days of notification of the measure; otherwise it lapses and the applicant compensates the damage. BOE-A-1998-16718
• Art. 106 LJCA. Where the authority is ordered to pay a liquidated sum, it pays from a budget appropriation that is always treated as expandable, plus statutory interest from notification of the first-instance judgment. Three months after the final judgment is communicated, enforcement may be sought, and the judge may raise the interest by two points if a lack of diligence is found. Either party may ask for set-off against sums owed to the authority. BOE-A-1998-16718
• Art. 25 Ley General Presupuestaria. Unless a special law provides otherwise, the right to recognition of obligations not requested with supporting documents is time-barred after four years, counted from completion of the service or from when the right could be exercised, as is the right to demand payment of recognised obligations, counted from notification of the recognition. Limitation is interrupted in accordance with the Civil Code. BOE-A-2003-21614
• Art. 7 Ley 3/2004. Late payment interest is the agreed rate and, failing agreement, the rate applied by the European Central Bank to its most recent main refinancing operation before the first day of the calendar half year, plus eight percentage points. It applies for the following six months and is published every half year in the Official State Gazette. BOE-A-2004-21830
• Art. 8 Ley 3/2004. When the debtor is in default, the creditor is entitled to a fixed sum of forty euros, added in every case and without express request to the principal debt, and to duly proven recovery costs above that sum, unless the debtor is not responsible for the delay. BOE-A-2004-21830

Each article checked against the consolidated text published in the BOE (the Spanish official gazette).

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