Does my Agency still owe me money if the Client goes into Administration?

[Safe Collections]

At this point I must make clear, I have no affiliation with any collection agencies that have posted on this thread or on the site. I am not a lawyer however I am a law student. I advise you to seek independent legal advice no matter what you decide to do.

We think he means us

Well OK, but I was not wrong in my intial response either.

No slight intended We agree the question around the opt in/out is relevant but it isn't the only issue.

So long as it's not tested in court or clarified in statute, it will remain as a grey area so Agencies can happily continue with their bully, bluff and bluster tactics then claim that it was an honest interpretation of the law if they get challenged....

We couldn't agree more.

It's comments like that, that are vey dangerous on an Internet forum. It is no walk in the park sitting in front of a Judge arguing your own case. Especially not if the other party has instructed counsel.

We wouldn't fight our own claim and we have a more than passing familiarity with the law.

If the sum in dispute is greater than £5000, as the losing party you are potentially liable for both parties legal costs which can quite quickly amount to five figures. Your suck it and see analogy could easily result in the OP losing a lot of money, so again to the OP you really should consult with a legally qualified individual if you want the best answer.

It should also be noted that costs can be awarded in small claims matters as well, at the Judges discretion. As one judge told a client of ours who got hammered for costs in small claims "litigation is a risky business!"

[joe500]

First of all I would just like to thank everyone for their extremely useful and insightful comments.

I didn't sign any form that explicitly asked me to opt out, nor is there any mention of this term on my contract. I have to get my timesheet approved by the client on a weekly basis if that helps show I'm opted-in??) So on the basis of that I'm pretty certain I haven't opted out.

I would also like the point out that the agency haven't said that they're not going to pay me - they've just been a bit cagey and have stated that they are still waiting for the final word from the administrator. I started this thread speculatively to see where I would stand should that scenario play out.

In one of their initial responses post administration they actually sent me an email stating that they would be claiming the bad debt off their credit insurance policy, does anyone know much about this? I appreciate that this is a complex area with multiple factors involved but is it likely that they will be able to claim all their bad debt against this policy or do these policies tend to only provide a proportion of it?

Thanks

[Safe Collections]

In one of their initial responses post administration they actually sent me an email stating that they would be claiming the bad debt off their credit insurance policy, does anyone know much about this? I appreciate that this is a complex area with multiple factors involved but is it likely that they will be able to claim all their bad debt against this policy or do these policies tend to only provide a proportion of it?

Credit insurance is much like any other insurance, you pay a premium for cover and as long as you abide by the terms set out by the insurer they will cover any bad debts.

Provided the client co has stuck to the letter of the policy the insurance will pay out. But like all insurers they will probably try and find a loophole to avoid payment if at all possible...

In all honesty given that the contract got a bit muddied towards the end our advice is, if you are offered a reasonable figure in settlement, take it and move on.

But don't offer them a discount, pursue the full balance and let them make any offer

[malvolio]

It's comments like that, that are vey dangerous on an Internet forum. It is no walk in the park sitting in front of a Judge arguing your own case. Especially not if the other party has instructed counsel. If the sum in dispute is greater than £5000, as the losing party you are potentially liable for both parties legal costs which can quite quickly amount to five figures. Your suck it and see analogy could easily result in the OP losing a lot of money, so again to the OP you really should consult with a legally qualified individual if you want the best answer.

WHo said anything about arguing your own case - although if you do, and if you know your facts, you get a much easier ride than a qualified counsel would. Oh if only there were an organsation that would support such a case to completion in the interests of all contractors...

More to the point, obviously the first step is to get qualified legal advice (hint: most if not all solicitors will give you 30 minutes free consultation, more than enough to establish the rights and wrongs of a case). Then you would have an idea whether or not an action is a sensible next step. It may not be, but then we're all grown ups running our own companies, so we ought to be able to assess the risk for ourselves.

So why do you assume the OP isn't able to make that call for themselves?

[Wanderer]

I didn't sign any form that explicitly asked me to opt out, nor is there any mention of this term on my contract.

This means you are NOT opted out which is good news. They agency must pay you even if they don't get paid by the client.

My question is this; are the recruitment agency legally obliged to pay my invoice? In the contract there is a clause which states that they can delay payment

The answer is that they DO have to pay you and they CANNOT delay the payment simply because they haven't been paid. This is your statutory right under the Agency Conduct Regulations.

Don't even let them mess you about by delaying the payment, the agency not getting paid is completely and utterly irrelevant to your situation. Write to them and remind them that they will have to pay a penalty and interest if they don't pay on time.

I would also like the point out that the agency haven't said that they're not going to pay me - they've just been a bit cagey and have stated that they are still waiting for the final word from the administrator. I started this thread speculatively to see where I would stand should that scenario play out. In one of their initial responses post administration they actually sent me an email stating that they would be claiming the bad debt off their credit insurance policy, does anyone know much about this? I appreciate that this is a complex area with multiple factors involved but is it likely that they will be able to claim all their bad debt against this policy or do these policies tend to only provide a proportion of it?

None of this matters. The agency owe you money and that is the end of it as far as you are concerned. If they can't get their money from the end client then that's their tough luck. They still have to pay you the full amount you are owed. Furthermore, even if the client can't or won't sign timesheets then this is no barrier to getting paid either, presuming you can otherwise prove that you worked the hours.

In all honesty given that the contract got a bit muddied towards the end our advice is, if you are offered a reasonable figure in settlement, take it and move on. But don't offer them a discount, pursue the full balance and let them make any offer

I don't see any reason to settle for less than the full amount owed. The agency is still solvent so they can pay up.

[Incognito]

I agree it looks like the opt out / in question isn't an issue here. What does your contract state with regards to payment terms I.e payment how long after invoice. Secondly how long had it been since you submitted your invoice?

[joe500]

Payment terms are 14 days in receipt of invoice. I submitted my invoice at the beginning of September.

I am currently pursuing the line of attack that the contract contravenes statutory regulations and will let you all know how it progresses.

On a related note, do I have a right to send an invoice for the notice period? In the contract it does say something along the lines of we can terminate without notice if we believe the client will not be able to pay their invoices, but just thought I'd double check!

[speling bee]

Payment terms are 14 days in receipt of invoice. I submitted my invoice at the beginning of September.

I am currently pursuing the line of attack that the contract contravenes statutory regulations and will let you all know how it progresses.

On a related note, do I have a right to send an invoice for the notice period? In the contract it does say something along the lines of we can terminate without notice if we believe the client will not be able to pay their invoices, but just thought I'd double check!

You certainly have the right to send an invoice.

[Wanderer]

On a related note, do I have a right to send an invoice for the notice period? In the contract it does say something along the lines of we can terminate without notice if we believe the client will not be able to pay their invoices, but just thought I'd double check!

Hmm, probably not. You should just invoice the agency for the time you worked.

In your specific case, I presume you have already raised an invoice for the time worked? If you haven't then they aren't going to pay, are they! If you have raised an invoice and they have not paid yet then it's well overdue.

I would be inclined to up the ante by sending a final demand with 7 days to pay followed by a "letter before action" but do a search for "dunning" on this forum for some general information about how to chase debts. You are not the first person to be messed about by an agency being slow to pay.

Rest assured that (from what you told us) you have a very strong case. When you send your demands, do not get involved in a slanging match just keep it simple and to the point.

Once the demand is made, there is plenty of opportunity for them to argue the point. Ask them to put everything in writing and reply to them in writing otherwise they tend to turn around and deny it all later on or try some stupid stunts on you.

Good luck!

[Safe Collections]

I don't see any reason to settle for less than the full amount owed. The agency is still solvent so they can pay up.

Edited: Wrong post... Sorry Below still stands however.

If it is a case of say 85% paid now or pursuing the full 100%, it may make more sense from a cashflow perspective to accept a reduced settlement rather than incur the extra costs associated with being overdrawn and the like.