Payment way overdue - what are my options?
 

Hi there,

I did some work for a client back in late 2007 and I haven't seen a penny of it yet, despite many emails and phone calls. It's not a huge sum of money - they owe me £633. It seems that my best option is to pursue "small claims" legal action. I really don't care if I loose this particular client.

Unfortunately, there wasn't a contract between me and the client.

Before doing the jobs in question, I'd never worked for this particular company before but a friend-of-a-friend was involved with the company so I took it on good faith that the company was respectable.

My plan is to send them an email and a written letter warning them that if I don't receive payment in two weeks time then I will have to start the small-claims procedure. I've been working full time in video production for over 2 years and this is the first time I've had a client fail to pay me.

If anyone has any advice or if they've been through a similar process then I'd love to hear about it!

Many thanks,
Jack

After this time, I'd not waste more giving them a last warning. Straight to small claims, If you're in BECTU might well be worth telling them, just in case the company is well know for doing this to individual freelancers - kind of a trend? At least the County Court Judgement order will give you some satisfaction, even if it doesn't make them pay up!

BECTU have got money out of producers for me (one in Germany). I'm not sure how good the London Division at this sort of the thing, the Regional Division was very good.

The small claims is the other way.

Hi Jack - That's not nice when this kind of thing happens and particularly when your not long in business. After 25 years of business we have been there a few times, despite written contracts. In my own experience, it is always better to try and solve these matters outside of legal proceedings. You mention you have made a number of calls ( forget emails ), what was the result of those calls? are they refusing to pay or are they promising payment then sending you nothing? do they answer the phone? was there any verbal agreement? what exactly was the agreement? can your friend help sort this out? are they using your materials at the moment or have they received nothing at the moment?

Scots law differs from English law but we have always found a reputable debt collector connected to the sheriff court has always done the trick - of course there is a charge for this service but all of this can be claimed for. At the end of the day you are entitled to claim expenses under the (LPL) Late Payment Legislation Act where you can inform your client that you will be claiming for interest and recovery costs - the current rate of payment can be found at www.payontime.co.uk - the last I looked the compensation for an amount up to £999.99 was £40.00

So if all else fails - you need to send a covering letter and amended invoice/statement to the client (registered letter) showing the amount outstanding with a £40 surcharge added, and with the added statement - "to include all debt recovery costs" it is also worth noting that all imagery created by yourself is owned by yourself until paid for, and any use by the client would be a breech of copyright.

Now, of course they could turn round and deny that there was any agreement and that they did not realise you wanted paid, and that would be a problem, because it would then need to go to court - "he said, she said" scenario - this is why you are best to try and sort this out amicably.

I am sure you have now learned ... never undertake work without a signed agreement. Always outline clearly what your client (future) can expect for the amount agreed, and get them to sign an agreement on company headed paper, preferably with a job number so it does not get held up in an accounts system. Your own marketing materials should also carry information regarding your terms and conditions.

I understand the desire to secure a possible video production project as soon as possible, but having a written contract is part of the professional approach expected by other professionals. Believe me, even with respected companies with household name status, if your paperwork is not in order you can have a great deal of trouble getting paid on time.

All the best with it...

Regards Stu.
www.studioscotland.com

Hi guys,

Thanks loads for all the advice. Yes, you're right - I should use a contact in the future to help to protect myself from companies not paying.

Stew, I completely agree that it's best to try to sort these things out without getting the courts involved. I'm currently trying a last-ditch effort to get in contact with the company before getting the courts involved. I've given them a deadline and said that if they don't pay by the deadline then I'll start legal action. Hopefully the threat of legal action will be enough to get them to pay up.

In answer to your questions asking which ways I've tried to get in contact with them already... my friend left the company in January so unfortunately she's no longer able to help me out. Since she left, I have sent the company quite a few emails and called them. They haven't replied to a single email. When I call, the person who picks up either says "sorry, there's no one in the office at the moment, I'm only on the switch board" or "the person who deals with this isn't around, let me take your number and I'll get them to call you". I haven't yet tried really putting pressure on the person at the other end of the phone and that'll probably be my next trick. Perhaps I should have put pressure on them before now and it's possible that I'm a bit too averse to confrontation.

It's just infuriating that it takes so much time and effort to chase this sort of thing.

Thanks again for all the help,
Jack.

I don't know what the laws are like in the UK, but here in the States neither phone nor email would be sufficient to protect your rights -- they're not seen as "official" forms of communication. Here you'd have to send a physical letter by certified or registered post with a return receipt requested, so you could verify the company received it and who signed for it.

You might want to consider sending such a letter outlining the future legal actions which will commence if they don't pay up.

Also, if the client company has a website, they may list an address for legal correspondence, and if they do you might want to send a copy there as well. I find that lawyers are pretty good at paying attention to stuff like this.

Jack,

Often in cases like these, the problem is that right now it's more painful for them to pay you - then to dodge you. So you need to reverse this fact - legally and properly.

Back in my early days this happened to me exactly three times.

What I learned was that it's REALLY easy for anyone to dodge calls, emails and even paper mail. Practically painless, in fact.

What is HUGELY uncomfortable for someone trying to dodge a bill is to have to do that when dealing with a LIVE HUMAN BEING.

What I did was simple dress respectably, and show up at their physical offices. I'd tell the receptionist who I was there to see (or just tell her you want to speak with someone who's responsible for accounts payable) then plop down in a seat in the lobby and make it clear that I was going NOWHERE until I talked to a live human being.

Out of three instances I can recall, I walked away with a check for the entire amount in two cases, (including one where I had to fly from Phoenix to San Diego for the collection call - THAT surprised them HUGELY - but the flight was cheap and I figured I'd invest the $60 round trip airfare and a day of time to collect the $1500 or so - and it worked!) - and in the other (local firm) I was told that they'd send me a check the following week - whereupon I informed them the one week delay was fine, but that I'd be back to pick up the check at 9am on the day in question, and would again, happily wait ALL DAY in their lobby until I could pick up my check. (It was waiting when I arrived)

My advice. Forget the phone, the mail, and the courts unless they clearly state they aren't going to pay you. SHOW UP WHERE THEY WORK. And let them know that they need to deal with you if they don't want a guy spending hours in their lobby with an unresolved business problem.

I think it's important not to go in with attitude or hostility. Simply with the clear understanding that you've done work for them and you need to be paid. Period. Threatening or hassling is a BAD idea. If they push back, rationally tell them that this is a simple business debt and show them evidence of the work you've done for them and make it CRYSTAL CLEAR that you expect to be paid. And paid promptly. If they come up with justifications or evasions, just hold firm to the line that these are none of your problems. That the person who commissioned the work was THEIR employee and you did the work, as ordered, and you're expecting payment. Period.

Nine times out of ten that will do the trick.

The exception would be if they can honestly argue that the person commissioning the work didn't have the authority to bind the company to the deal. Then you have to look to your friend for relief and figure it's the partial cost of a business education.

Good luck.

Sending a letter is always better than e-mails or phone calls. I always send a statement at the end of 30 days, then follow up later with a letter or phone call depending on the client.

Could be your client is having financial difficulties of their own, so it might be worthwhile discussing staged weekly/monthly payments with them if that's the case.