major agency legal strife - agency withholding money

[Safe Collections]

Hi

I need some advice...
I am contracting at a blue chip. They have a main agency that they deal with , lets say 'blue chip agency ' I contracted with blue chip last year , they asked for me back and I called the person who I was dealing with last time to get the contract sorted , only a long way through the process did I realise he had setup on his own and was basically a one man band.
I was payed ok for the first 3 months ,Novembers invoice was due January 1st , he seemed very pushy about whether I was getting renewed , at the same time as being pushy about getting my timesheets signed off for December.
I didnt know whether I was getting renewed at the end of the January which is when the contract finishes , I wasnt too bothered and so didnt push it with the client , but the agent was very pushy about it , I got my timesheets signed off for december.

OK so to clarify, the contractual chain is:

You --> One Man Band --> Blue Chip Agency --> Blue Chip Client

When the November invoice was overdue around jan 8th I started chasing on email and eventually he said that he was in financial difficulty and was hoping to sort it out with the bank. He had been paid by blue chip agency .

Then a few more similar excuses and it has become clear that he is either
in financial difficulty
or he is thinking I have renewed with someone else and he is holding money because he thinks the clause in his contract has been breached that says I have to renew with him ,
or he is basically trying to grab the money

So Blue Chip Client pays Blue Chip Agency, Blue Chip Agency pay One Man Band and OMB makes various excuses about financial difficulties?

That is not a very encouraging sign.

I also had timesheets authorised at the beginning of January for December.

So he now has an invoice with Blue chips agency for December although he is not in reciept of the money. Although he is trying to claim this money from Blue chips agency , who are for the time being withholding the money as they know I havent even recieved November invoice, but they have made it clear , that at the end of the day, their contract is with him and not me , and he could come after them for the invoice for December even though they know I have not even been paid for November.

One Man Band does have a claim, but you could also have a claim over these monies. If you get a CCJ against One Man Band it is possible to use a court order to claim against the money Blue Chip Agency hold, but only if they still have the money!

He has made a very weak offer to transfer the contract from him to the Blue chip agency starting from January , but he has put a caveat that 'his accountant may think this is an offence as it is to the detrement of his company' - which sounds like nonsense to me , and a way of perhaps delaying this hand over until he gets paid for my work I did in december.

Technically a company director has a duty to act in the best interests of the company, but using it as an excuse to keep you tied in is laughable especially given the lack of payment.

I have a feeling he will say he will pass the contract over as from January 1st as a delaying tactic to see if he can get hold of the december invoice , which will be due on 8th Feb , and I am pretty sure he wont hand over the contract until he is in reciept of Decembers invoice , which will be 2 months he will be holding.

Basically it feels like I am in the process of being defrauded.

It sounds to us like One Man Band is trying to make the company as cash heavy as possible before winding it up to the detriment of his creditors.

I have sent a letter of action to him regaring november invoice but he pretty much ignored it apart from asking if I want to transfer the contract to blue chip agency and he will pay me for November and December 'in a few weeks when his financing gets sorted'

So your letter spurred One Man Band on to offer to transfer the contract but didn't bring forth any payment? Again this is not a positive sign.

While the blue chip agency are being helpful , I dont know whether to try to get the contract moved over , or go in heavy with debt collection for november invoice and hope the blue chip agency hold out on paying the december invoice that he will soon be claiming.

If i go in legally heavy now then he may refuse to hand the contract over for january and then I may not be able to get that money either

So in approximately 8 days One Man Band will be sitting on £15k of your money? We would agree you have to do something and soon, the longer you take no action the more you increase both your potential financial loss and the chance that One Man Band will go pop.

Our suggestion based on the info above would be:

1. Try and get agreement to transfer the contract ASAP, certainly within the next 10 days at the most. If One Man Band wont agree or drags his heels it may be an indicator that he was just using this offer as an excuse to keep you happy.

2. If One Man Band can't/wont transfer the contract, you need to give careful consideration to ceasing to supply services. Check your contract for any clause on payment that may give you the option to terminate due to non payment of invoices.

3. Don't hang about on recovering the monies due or shortly due. Either get an experienced commercial litigation solicitor to immediately issue proceedings (risky if the debtor has financial difficulties, as if they can't pay the solicitors costs you will have to!) or use a good Debt Collection Agency (avoid any agency with advance or membership fees and make sure they have experience dealing with contractors). You can get some more in depth details on our contractor piece here "How contractors can get paid, if all else fails"

Good luck

[northernladuk]

I must stress that I'm no expert here, but getting the contract moved over sounds like a good idea and will restrict your exposure on future invoices. I don't see a downside to the move. Have I missed something?

I would have thought considering your obligations to your shareholders being a director of a LTD means you have to move. Invoicing a company that doesn't intend to pay is business suicide.

[Platypus]

I must stress that I'm no expert here, but getting the contract moved over sounds like a good idea and will restrict your exposure on future invoices. I don't see a downside to the move. Have I missed something?

[Jessica@WhiteFieldTax]

PCG = excellent idea!

Another thought? Have you got legal expenses on your business or home insurance?

If on business insurance, then give them a call.

If its on the home insurance, then it may be worth downplaying the self-employed-contractor-bit (but don't let tax man hear that ) and see if home insurance will cover that as a employment dispute?

As my office is at home, I have combined home and business cover on one policy, and am just using that right now to start a claim against BT for a bogged up phone installation.

Worth a try? There may be a legal advice line as well.

[fraymond]

I once worked with a contractor who was in a similar position to this, he was a member of PCG (I am not) and they referred him to someone and they sent something like a "notice of intention to declare bankruptcy" which really got he ball rolling. Basically they came to an agreement, there was some small loss of money but he took the loss and moved on. Perhaps you could phone PCG or look on their website for firms they may recommend? Do let us know what you decide to do.

[northernladuk]

Advise your client of the situation pronto so they can stop paying him as well.

[Andy Hallett]

major agency legal strife - agency withholding money

Hi, good advice above. If you are not being paid in line with your agreed terms you should seek urgent legal assistance. On the face of it not a complicated matter.

I know a very good commercial lawyer in the field of recruitment who is just setting up his own practice. Will check if he is live yet.

[Jessica@WhiteFieldTax]

Sorry to hear of these woes.

I think you need a good commercial lawyer to duff the agency up.

Best thing is to maybe ring around a few law firms, till you find one who is making the right noises about moving quickly - anyone of offers you an initial appointment next week isn't commercially savvy enough.

[tsharp]

Hi

I need some advice...
I am contracting at a blue chip. They have a main agency that they deal with , lets say 'blue chip agency ' I contracted with blue chip last year , they asked for me back and I called the person who I was dealing with last time to get the contract sorted , only a long way through the process did I realise he had setup on his own and was basically a one man band.
I was payed ok for the first 3 months ,Novembers invoice was due January 1st , he seemed very pushy about whether I was getting renewed , at the same time as being pushy about getting my timesheets signed off for December.
I didnt know whether I was getting renewed at the end of the January which is when the contract finishes , I wasnt too bothered and so didnt push it with the client , but the agent was very pushy about it , I got my timesheets signed off for december.

When the November invoice was overdue around jan 8th I started chasing on email and eventually he said that he was in financial difficulty and was hoping to sort it out with the bank. He had been paid by blue chip agency .

Then a few more similar excuses and it has become clear that he is either
in financial difficulty
or he is thinking I have renewed with someone else and he is holding money because he thinks the clause in his contract has been breached that says I have to renew with him ,
or he is basically trying to grab the money

So basically he is holding 1 months money that has been paid , not by the blue chip but by there agency as this is who he holds the contract with.

I also had timesheets authorised at the beginning of January for December.

So he now has an invoice with Blue chips agency for December although he is not in reciept of the money. Although he is trying to claim this money from Blue chips agency , who are for the time being withholding the money as they know I havent even recieved November invoice, but they have made it clear , that at the end of the day, their contract is with him and not me , and he could come after them for the invoice for December even though they know I have not even been paid for November.

He has made a very weak offer to transfer the contract from him to the Blue chip agency starting from January , but he has put a caveat that 'his accountant may think this is an offence as it is to the detrement of his company' - which sounds like nonsense to me , and a way of perhaps delaying this hand over until he gets paid for my work I did in december.

Basically blue chip agency will be paying him for december invoice on around 8th Feb.

This will mean he owes me 2 months money , around 15000.

I dont know what to do !



I have just worked january , and if I submit my time sheets then he can invoice again which will make it 3 months he owes me for.

I have a feeling he will say he will pass the contract over as from January 1st as a delaying tactic to see if he can get hold of the december invoice , which will be due on 8th Feb , and I am pretty sure he wont hand over the contract until he is in reciept of Decembers invoice , which will be 2 months he will be holding.

Basically it feels like I am in the process of being defrauded.

I have sent a letter of action to him regaring november invoice but he pretty much ignored it apart from asking if I want to transfer the contract to blue chip agency and he will pay me for November and December 'in a few weeks when his financing gets sorted'


While the blue chip agency are being helpful , I dont know whether to try to get the contract moved over , or go in heavy with debt collection for november invoice and hope the blue chip agency hold out on paying the december invoice that he will soon be claiming.

If i go in legally heavy now then he may refuse to hand the contract over for january and then I may not be able to get that money either

I just dont know what to do.

Any advise ? or any recommendations on someone with good experience who could give me advise on what to do , or a good legal but no nonsense debt collector , or go to the police ?

Any help greatly appreciated
Thanks