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Ben Jones
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 46184
Experience:  Qualified Solicitor - Please start your question with 'For Ben Jones'
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There. I run a small creative agency doing design and

Customer Question

Hello there. I run a small creative agency doing design and marketing comms for marketing agencies. Unfortunately I have been left in rather a sticky situation by a client of mine who after 2 months worth of work, and now 3 months of trying to get money out of him, has so far neglected to pay me. This has left me with a rather sizeable hole in my finances (Approx £11k in fact) which is seriously affecting my business.
I have tried being patient, I have sat across the table with him and agreed terms face to face, which he has then ignored. I have given him a final deadline before I contact the client and take further action, which has come and gone. He is now refusing to answer any calls, reply to any emails and has since moved offices. I have heard that taking the small claims route is likely to be unsuccessful as if he hasn't got the money, there’s no way I’ll be on his list of priorities, and it could take quite some time to go through the process so I am at a loss.
I can’t afford to walk away from that amount of money and obviously it’s affecting my business drastically so I was wondering if there was any advice you could give me in how to make him pay?
Many thanks in advance
Elton
Submitted: 1 year ago.
Category: Law
Expert:  Ben Jones replied 1 year ago.
Hello, my name is***** am a solicitor on this site and it is my pleasure to assist you with your question today. Do you know if he actually does have the money and also was this client an individual or was he working with you through a company?
Customer: replied 1 year ago.

Hi Ben. Thanks for your reply.

I do believe he has the money because every time I speak to him he tells me that he is moving money around to accommodate. Also he uses a factoring company to help with cash flow. Also, I have recently started to talk to the end client who informs me that they have already paid him for the work.

I believe that he is operating as a Limited Company.

Expert:  Ben Jones replied 1 year ago.
The reality is that you would either have to write off the debt or start pursuing it more aggressively, such as through the courts or petitioning for the insolvency of his business. As this is a civil matter, the only way to try and force him to pay is to take him to court and obtain a court judgment against him. You can then try and enforce that against him and there are certain options you have, such as bailiffs, property charging orders, etc. It does depend on what assets the company has and if it is worth pursuing. Of course you would have to consider the costs involved in that (should not be too great if in the small claims court) and the risk that you are not guaranteed to get anything back. You could also petition for the winding up of the company. Some more details here: http://www.realbusinessrescue.co.uk/winding-up-petitions/process-and-procedure This would eventually close the company down and freeze its assets and accounts and these could then be used to pay off its debts. However, this can be an expensive option due to the court costs involved. So there is no right or wrong way to proceed – it really depends on the circumstances, what assets the company has and whether they are worth pursuing. It will involve some investigation on your part, or you could consider engaging someone (professional debt recovery company) to investigate them for you and advise on what the best way forward is. They could also assist with the next steps of either going to court or presenting a winding up petition. I trust this has answered your query. I would be grateful if you could please take a second to leave a positive rating (selecting 3, 4 or 5 starts at the top of the page). If for any reason you are unhappy with my response or if you need me to clarify anything before you go - please get back to me on here and I will assist further as best as I can. Thank you
Customer: replied 1 year ago.

Thanks Ben. How do I go about investigating the assets of the company?

Also is there any way I could get the end client involved?

One of the more complicated parts of this situation is that the end Client has paid him for the work, which my company has done and not been paid for. Therefore the end client cannot use the work as the IP still lies with me and my company. The end client can't give me any more money as they have paid him, and he has so far refused to pay me.

Effectively he has stolen £15k from the client and stolen £15k worth of services from me.

Surely thats more than a civil matter?

In addition, if I agree to give the client the work directly, where does that leave me legally if I still haven't been paid for it? What happens to the IP of the work?

Thanks Ben.

Elton

Expert:  Ben Jones replied 1 year ago.
Investigating the assets is not necessarily an easy task because it depends on what you are looking for. You need to check their accounts (easily done from Companies House), you can then use these to see what assets they may have and go further by trying to determine their value (for example if they have property you can go to the Land Registry to see how much it cost or who owns it and in what proportion, or you could use valuation sites to see what it may be worth). So there are various options but it depends on what they actually have. As you do not have a contract with the end client you cannot legally involve them. You cannot make them pay you directly for example. However, if you own the IP then you can try and prevent them from using the work although it would still not make them pay you for it as they are not directly answerable to you for that part. If you want to give them the IP rights then that is down to you and you will be effectively granting them a licence to use it, even if you have not been paid – you will still have to pursue the company you had contract with to get the money back and that is the person who owes you the money. You may think it is a criminal matter but the police are unlikely to view it as such. Many people automatically believe it is theft or fraud but the legal criteria is somewhat different. Of course you have nothing to lose by contacting the police but be prepared for them to state that this is a civil matter which they cannot help with. If your original question has been answered I would be grateful if you could please quickly rate my answer by selecting 3, 4 or 5 starts at the top of the page - it only takes a second to do and is an important part of our process. I can still answer follow up questions afterwards if needed. Thank you
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 46184
Experience: Qualified Solicitor - Please start your question with 'For Ben Jones'
Ben Jones and other Law Specialists are ready to help you
Customer: replied 1 year ago.

Thanks for your help Ben. Just another quick one.

Seeing as I am in contact with the client and the guy involved owes us both, is there a way I can get the end client to take legal action to recover their losses which will give them the chance to pay me instead?

Expert:  Ben Jones replied 1 year ago.
Yes that is possible - obviously it would depend on them being agreeable to go that far but there is nothing topping them from suing this person, getting the money then entering into new contract with you and paying you
Customer: replied 1 year ago.

Thanks Ben. Good to have your help. Cheers

Expert:  Ben Jones replied 1 year ago.
You are welcome, best of luck!

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