DSC Default Process January 2019

Agenda Failure to make payment under the DSC DSC Default UNC Default Recovery Steps Termination Decision Tree Areas for Improvement

Failure to make payment under the DSC Section 4 of the DSC Credit Policy sets out the process in the event of a customer failing to make payment. Where payment has not been made the CDSP sends notice to the customer to pay in full within 2 business days of notice. Notice states that unless payment is received by that date the CDSP will notify the committee of the customers failure to pay and will convene a meeting of the committee where remedial steps maybe taken. Remedial steps Review & revise the defaulting customers DSC Credit Limit. Notify other customers of the defaulting customers failure to pay. Accelerate the due date of payment for future invoices (period agreed by committee) Suspend Specific or Additional services of defaulting customer Take DSC recovery steps as approved by committee Enforcing and realising DSC Security provided to CDSP

DSC Default A DSC Default shall occur where the committee directs the CDSP to give the customer a Credit Default notice pursuant to paragraph 3.5.3 or 4.14 of the DSC Credit Policy. 3.5.3 - where and for as long as the defaulting Customer's DSC Indebtedness for the time being exceeds 100% of the Customer's DSC Credit Limit, the CDSP may convene a meeting of the Committee and the Committee may direct the CDSP to give a Credit Default Notice to the defaulting Customer in which case the CDSP will send a Credit Default Notice to the defaulting customer with a copy to the authority and each transporter. 4.1.4. Where and for as long as the defaulting Customer has not paid the CDSP any sum due in excess of the amount specified in the DSC Credit Rules (£10k as detailed in 6.1.4 of the Credit Rules), the CDSP may convene a meeting of the Committee and the Committee may direct the CDSP to give a Credit Default Notice to the defaulting Customer, in which case the CDSP will send a Credit Default Notice to the defaulting Customer with a copy to the authority and each transporter.

UNC Default Under Section V.4.3.1.h of UNC, a Shipper User commits a User Default under UNC if it has committed a DSC Default. or The defaulting User (if a Trader User) has committed a default under the UK Link User Agreement (Section V.3.1.i) V.3.3. Upon the occurrence of a User Default the Transporter may give notice (Termination Notice) to the Defaulting User.

DSC Termination Decision Tree Start CDSP identify DSC default under DSC Credit Policy CDSP arrange emergency DSC Credit Committee where default discussed Terminate CDSP monitor organisation in line with DSC Credit Committee guidance No Yes CDSP hold call conference with GT Contract Managers for agreement to terminate GT Contract Managers obtain internal agreement and provide Termination Notice to CDSP CDSP issue Termination Notice and undertake closure activities Finish

Recovery Steps Regular updates will be provided to the committee by the CDSP as to the progress of recovery steps. All DSC Recovery Costs and amounts of unrecovered DSC Debt shall be recovered from customers in accordance with the Budget and Charging Methodology.

Areas for Improvement Introduction of a template to provide DSC Credit Committee members with key information on position prior to Emergency Committee meeting being held. Increase awareness of the Terminations process for internal and external users. Obtain feedback from committee members on what can be improved. Do SLAs need to applied to aid process?

Questions?