Sueing a third party

[David71]

Wondering if anyone has been in a similar situation and managed to recover lost revenue from a third party supplier?
Here's the outline:

• My Ltd company is providing services to an end client via a consultancy (contract ends on 26/01/23). Typical, normal day rate contract
• A large IT company (Company 'A') is supplying the overall 'solution' to the end client
• Company 'A' has f'd up in a spectacular style basically causing a 'down tools' situation for almost everyone on the project - permie, contractor, end client, tea-lady, everyone, except for themselves as they are working flat-out to rectify the f'up
• I have a real feeling that in the next day or so I'll be told there's no work for me (I'm currently updating documents etc.) until the f'up is solved, which is estimated to be February at the earliest so I'll not be able to invoice from now until the end of my contract
• Company 'A' has openly accepted the mess is their responsibility

Question is, (if I'm told to stop invoicing) can I go after Company 'A' as their mess has caused me loss of work up to 26/01/23?
I'm not looking for anything after 26/01 as I've got a new gig lined up but I'm potentially looking at a loss of invoiced revenue of 18k or thereabouts.

Advice?

[TheDude]

I suspect there is nothing in your contract guaranteeing income until the 26/01/2023 and that the cost of going after the company in the courts is just not worth the risk for your £18k out of pocket.

[malvolio]

It's not a loss of revenue if you aren't being given work to do, it's an unfortunate side-effect of being in business when the work dries up. If you sue, you probably won't win but it will cost you more than £18k in legal fees to have any chance of winning. So it's annoying and you have our sympathy but that's about all you are going to get I'm afraid.

Been in the same position myself. Was out of the door almost immediately. Annoyingly when the cause of the cock-up sorted it and got things working again, they implemented my solution to the actual business problem themselves without my help. tulip happens.

[David71]

I suspect there is nothing in your contract guaranteeing income until the 26/01/2023 and that the cost of going after the company in the courts is just not worth the risk for your £18k out of pocket.

My contract has an 'expected' number of days invoiceable:
"expected duration:130 Working days starting from Monday, 25th July 2022 to Thursday, 26th January 2023"

But I'm not thinking of going after the agency or consultancy (they both want me to keep putting in timesheets and invoicing as long as possible) but rather Company 'A' whose actions have directly caused a loss of revenue. I sort of liken it to sueing a person for loss of income if they hit you with their car and you can't get to work until you recover; I'd love to keep on working but Company 'A' have caused a 'car crash' which has directly stopped work.

[Lance]

No.


HTH

[gables]

Obvs I don't know your role in all this.... can you assist in fixing the mess? or maybe somehow working with the client in order to manage this situation?

[northernladuk]

Firstly, as soon as someone says 'sue someone' it's a pretty good indication they've no idea what they are doing. Anyone knows about debt recovery doesn't use the word sue and knows all the steps in between. Don't use the word. It generally makes people look utterly clueless.

Wondering if anyone has been in a similar situation

Yes, every contractor who's had a gig end early

and managed to recover lost revenue from a third party supplier?

No because they've not lost anything. Reasons why are in your contract

Here's the outline:

• My Ltd company is providing services to an end client via a consultancy (contract ends on 26/01/23). Typical, normal day rate contract
• A large IT company (Company 'A') is supplying the overall 'solution' to the end client
• Company 'A' has f'd up in a spectacular style basically causing a 'down tools' situation for almost everyone on the project - permie, contractor, end client, tea-lady, everyone, except for themselves as they are working flat-out to rectify the f'up
• I have a real feeling that in the next day or so I'll be told there's no work for me (I'm currently updating documents etc.) until the f'up is solved, which is estimated to be February at the earliest so I'll not be able to invoice from now until the end of my contract
• Company 'A' has openly accepted the mess is their responsibility

• Unlucky but happens to most of us at some point. Welcome to contracting.

Question is, (if I'm told to stop invoicing) can I go after Company 'A' as their mess has caused me loss of work up to 26/01/23?

No. You haven't lost work. You are a Time and Materials contractor so only get paid for the work you do. If there is no work you do not get paid so no loss.

I'm not looking for anything after 26/01 as I've got a new gig lined up but I'm potentially looking at a loss of invoiced revenue of 18k or thereabouts.

This is what contracting is about. Getting a supplier in and paying them for the work they do. We are a flexible resource and times like this we get let go. That's the advantage the clients have taking us on rather than perm. You need to fundamentally understand what you are. You also need to read and understand your contractor. It is, afterall, in your title as a 'CONTRACTor'

In there it will state no pay unless accompanied with a signed timesheet. You have no time sheet ergo no pay.

Not earning something does not mean you have lost it. You weren't given work so weren't entitled to it so you haven't lost it.

Just look at the positives, you've got some great evidence of your outside gig when HMRC come knocking.. Just don't tell them you expected to get paid it for doing no work though.

[PerfectStorm]

All very normal and you're being paid (I would hope, and assume) a certain way in recognition of a lack of mutuality of obligation - no work is guaranteed, and as long as you're being paid for what you HAVE done, none more is owed. The rest is merely intention.

[David71]

Thanks for all the replies.....I appreciate all the sympathy

I've had contracts end early before and fully understand the 'no work = no revenue' side of contracting but this is the first time I've had a supplier admit that due to their negligence a project has had to grind to a halt until they fix things - I have a feeling the end client will try and recover their losses from the supplier so why shouldn't I.

But there we go, sounds like a non-starter.

[jamesbrown]

I have a feeling the end client will try and recover their losses from the supplier so why shouldn't I.

But they will likely have actual losses they can demonstrate. You won't have any demonstrable losses because no pay is promised when no work is available (I assume that is what your contract says). As an aside, you don't have a contractual relationship with Company A, so you couldn't even theoretically raise a contractual dispute with them, only with your client, but you will not have lost anything under your contractual terms with your client (most likely).