What if agency went bust?

[kingcook]

Forking from this thread:
http://forums.contractoruk.com/busin...mplicated.html

What would/could you do if the agent went bust?

This has not happened to me or anyone I know. It's more of a discussion incase it ever does happen.

Assuming that it's client, agent and you in the chain, and there's some hand-cuff clause. Would it be legal to go direct with the client as soon as you know the agent had gone bust?

[BlasterBates]

Difficult one, basically the best thing is to just to tell the agent they're in breach and move on!

I would only continue with a new contract, continuing with the current agency just means you lose your money.

I would say that the contract ceases to apply because they're not paying, and so do the handcuff clauses, but on the other hand why bother with the hassle of some potential legal wrangle with the agency or liquidator, i.e. just get a new contract.

[northernladuk]

Having PCG+ would mean you get your money though.

[JoJoGabor]

Forking from this thread:
http://forums.contractoruk.com/busin...mplicated.html

What would/could you do if the agent went bust?

This has not happened to me or anyone I know. It's more of a discussion incase it ever does happen.

Assuming that it's client, agent and you in the chain, and there's some hand-cuff clause. Would it be legal to go direct with the client as soon as you know the agent had gone bust?

If the agency went bust, they don't exist as a legal entity and so all hand-cuff clauses are cancelled. This happened to me recently when the consultancy I was working for went into administration and then got bought by a new company. There were handcuff clauses in mine and the end-clients contract, which got reviewed legally, and the conclusion was the end-client could hire me directly, which they did, it probably helped that I refused to do any work for the new company while I got this sorted, and a nice rate rise to boot

[Safe Collections]

Article on it here...

What contractors should do if their agency or client goes bust

Having PCG+ would mean you get your money though.

PCG+ insurance only covers up to £7.5k of any losses and only if the agency is a UK registered company.

A lot of it will depend on what the exact situation is at the agency in question. If they are formally insolvent and the liquidator is called in then generally all bets are off and the contractor is free to approach the end client.

If however they are in administration, then technically the agency is still trading and contracts do not automatically terminate upon administration. This means the administrator could try and enforce a handcuff clause or charge the end client for the introduction in line with the contract.

In that instance the contractor would need to do what JoJoGabor did and have the contract reviewed prior to approaching the end client. Otherwise they could be opening themselves up to a claim from the administrators.

[DS23]

always monitor the solvency status of agents and clients. as soon as things start looking queer - down tools and get out. he say's with the current client owing three months of invoices...

[BlasterBates]

When the company goes bankrupt it doesn't usually cease trading immediately, an administrator will be appointed. His job is to see whether he can salvage the company and keep it going, even if it is for a short while, while they negotiate with creditors. This is often the case, so generally you will be dealing with the agency even after they've become insolvent, at least for a few weeks. The question is what do you do during the weeks when the administrator is running the company.

...and most of the money they keep because they have priority when it comes to payment.

Best thing is down tools and only pick them up when there's a payment in your bank account.

[VectraMan]

If however they are in administration, then technically the agency is still trading and contracts do not automatically terminate upon administration. This means the administrator could try and enforce a handcuff clause or charge the end client for the introduction in line with the contract.

WHS. The company ceasing to exist legally could be a couple of years down the line. It's entirely possible the administrator would find someone else to take over the business, and part of the value of that would be your handcuff clause.

But I would negotiate to go direct. At worse you might end up paying some of the fee back to the agent, but that'll be better than not earning.

[NickNick]

Difficult one, basically the best thing is to just to tell the agent they're in breach and move on!

I would only continue with a new contract, continuing with the current agency just means you lose your money.

I would say that the contract ceases to apply because they're not paying, and so do the handcuff clauses, but on the other hand why bother with the hassle of some potential legal wrangle with the agency or liquidator, i.e. just get a new contract.

it happened to me a few years back and was in deed the reason that I joined up on here. Background is thus:
On Client site through agency A.
Client decides that they don't want to deal with agency A any more and move contractors to Consultancy A through Agency B.
(Agency A then tries to sue me and others under the restraint of trade clause and fails)
All goes swimmingly with 6 months.
Call from someone (I forget who now) informs me and others that Agency B has gone bust and we will be told what to do.
I immediately leave site, some 6 weeks invoices down the pan.
Consultancy A then get the PA to the director to act as a factoring agent for payments to contractors.
I and other Contractors come back on site, bill for as long as it takes for us to land another role.
Client outsource all IT to HP
Cut to 18 months later and I get a letter saying that my 15K has been written off, meaning I will get nothing, but by then I've forgotten all about it.

[maruthu1997]

What if agency went administration?

My agency has just gone under administration. While I'm yet to talk to administrator and Company on this matter, I wanted to understand what best options available to negotiate with them. There is a company and Agency in between me and actual Client.

As such 2 months payment was due from Agency and 1 month is held by intermediate company. The agency went under a week ago and my contract ends by end of Mar 17. I'm still going to the site and work expected go for some more time.

Any comments would be greatly appreciated!