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Ben Jones
Ben Jones, UK Lawyer
Category: Law
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Experience:  Qualified Solicitor
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I did some consulting work for a UK company last year. I was

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Hi,
I did some consulting work for a UK company last year. I was advising them on how to raise capital and my payment was success based. I was working with the CEO. The CEO had an argument with the board and subsequently resigned (or claimed that he would resign - I just check at companies house and he is still listed as a director). I have a contract with the company which, although it is not written very well from a legal perspective, it is clear on each parties responsibilities. I agreed with the Chairman, on the phone, that we would meet to discuss the way forward with the contract and my ongoing engagement. He agree to this in February and has not been responding to my requests for a meeting since. The contract specifies a minimum payment if it is not terminated by 1 April 2018. I would like some advice on how to proceed. I put a lot of time into this and I do not want to get stuck. Thanks, David

Hello, my name is***** am a qualified lawyer and I will be assisting you with your question today.

What are you hoping to achieve?

Customer: replied 3 months ago.
I want the company to honor my contract. Please see the attached.

OK I have to review this in due course, as I am leaving the office shortly it may not be util tomorrow if that is ok?

Customer: replied 3 months ago.
That is OK. The contract agree to arbitrate if there is a dispute. I don't know if there is a dispute because they are not responding. I believe I am on reasonably solid legal ground because I can document everything I have done. I am most interested in understanding the steps I should take with the company to bring this situation to a successful conclusion.

I have had the chance to look at this actually. As is the case with any contract like this, its enforcement will depend on both parties actually agreeing to it. In other words you cannot force the other party to honour it and to allow you to continue with it. Therefore, if you are blocked from continuing with it, your only realistic option would be to go to court and get financial compensation for their breach. This would generally be calculated based on what you would have received had the contract been breached. It could be for loss of earnings or a notice period you were due.

If a party wishes to pursue another for financial compensation arising out of a dispute between them, they can do so by making a claim in the civil courts. As legal action should ideally be used as a last resort, there are certain steps that should be taken initially to try and resolve this matter informally and without having to involve lawyers or the courts. These can be summarised below and it is recommended the following procedure is followed to try and progress this matter further:

1. Reminder letter – if no informal reminders have been sent yet, one should be sent first to allow the other party to voluntarily settle this matter.

2. Letter before action – if informal reminders have been sent but have been ignored, the other party must be sent a formal ‘letter before action’ asking them to resolve this amicably within a specified period of time, usually 7 to 14 days. They should be advised that if they fail to do contact you in order to resolve this matter, formal legal proceedings will be commenced to pursue them for the compensation in question. This letter serves as a ‘final warning’ and gives the other side the opportunity to resolve this matter without the need for legal action.

3. If they fail to pay or at least make contact to try and resolve this, formal legal proceedings can be initiated. A claim can be commenced online by going to www.moneyclaim.gov.uk. Once the claim form is completed a copy will be sent to the other side and they will have a limited time to defend it. Once they are aware that legal proceedings have commenced it may also force them to reconsider their position and perhaps prompt them to contact you to try and resolve this.

As a final tip, it is always advisable to keep copies of any correspondence sent and received as the courts would like to refer to it if it ever gets that far.

I trust this has answered your query. Please take a second to leave a positive rating by selecting 3, 4 or 5 stars above - this is an important part of our process and recognises the time I have spent assisting you. If you still need me to clarify anything else, please reply on here and I will assist as best as I can. Thank you

Hello, I see you have read my response to your query. Could you please let me know if it has answered your original question? You can either reply on here with a quick ‘Yes, thanks’, or select 3, 4 or 5 stars on this page. I can still answer follow up questions if needed to clarify anything for you. Many thanks

Customer: replied 3 months ago.
I have a few additional questions.1. The agreement contains this clause "The Parties agree that any and all disputes arising out of the terms of this agreement, their interpretation, and any of the matters herein, shall be subject to binding arbitration in London, England using International Arbitration Rules, or by a judge to be mutually agreed upon. The Parties agree that the prevailing party in any arbitration shall be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award." Since we have already agreed to settle any disputes in arbitration, do you still recommend that I use the moneyclaim.gov.uk approach?2. My consulting company is based in Sweden and I am a Swedish resident. I do have a UK 'post office box' but according to what I read I am not eligible to use moneyclaim.gov.uk unless I have a UK address. If I can't use this approach, which appears likely, what do you suggest?3. The contract contains the following clause related to a minimum fee (it plies even if they abandon the funding effort) "As compensation for services rendered under this contract, the Company will pay to DWither Management AB reasonable expenses for activities related to this contract and a minimum fee of £20,000 and grant the advisor an option to purchase 3,000 shares in the Company, of which, 1,500 shares must be exercised within 2 years of the grant date and 1,500 shares must be exercised within 6 years of the grant date. The strike price of the options will be set at £10 per share." From my perspective it appears as though I would need to claim that they breached the contract in order to make a claim for the minimum fee. Is this correct? Can I use their lack of response to multiple attempts to discuss the situation as grounds for my claim that they breached the contract and I am therefore entitled to the minimum fee?Thanks,David

Hello David, to answer your follow up queries:

I have a few additional questions.

1. The agreement contains this clause "The Parties agree that any and all disputes arising out of the terms of this agreement, their interpretation, and any of the matters herein, shall be subject to binding arbitration in London, England using International Arbitration Rules, or by a judge to be mutually agreed upon. The Parties agree that the prevailing party in any arbitration shall be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award." Since we have already agreed to settle any disputes in arbitration, do you still recommend that I use the moneyclaim.gov.uk approach?

The problem is that regardless of what is in the contract, the other side could refuse to engage in arbitration, which then leaves your only option still to be the County Court. Therefore, if you have tried to engage with them and to instigate arbitration, but they have failed to respond or agree to it, you may have to eventually go down the legal route anyway.

2. My consulting company is based in Sweden and I am a Swedish resident. I do have a UK 'post office box' but according to what I read I am not eligible to use moneyclaim.gov.uk unless I have a UK address. If I can't use this approach, which appears likely, what do you suggest?

You do need to be a UK resident to be able to use the court procedure. There is a European Small Claims Court for any claims up to 5,000 Euros, where you can use it from anywhere in the EU and it will still be binding in another EU country, but assuming your claim is for more than that, it will not be of use. In these circumstances you will have to consider engaging a lawyer formally to deal with the more complex cross-jurisdictional rules of a non-resident claiming in the UK courts. Still, you can follow the initial few steps in my original response to try and put some pressure on them

3. The contract contains the following clause related to a minimum fee (it plies even if they abandon the funding effort) "As compensation for services rendered under this contract, the Company will pay to DWither Management AB reasonable expenses for activities related to this contract and a minimum fee of £20,000 and grant the advisor an option to purchase 3,000 shares in the Company, of which, 1,500 shares must be exercised within 2 years of the grant date and 1,500 shares must be exercised within 6 years of the grant date. The strike price of the options will be set at £10 per share." From my perspective it appears as though I would need to claim that they breached the contract in order to make a claim for the minimum fee. Is this correct? Can I use their lack of response to multiple attempts to discuss the situation as grounds for my claim that they breached the contract and I am therefore entitled to the minimum fee?

Potentially, yes you can use this but a breach of contract would generally be more serious than a lack of response on their part. For example, if they are not honouring the other terms of the contract, not allowing you to work when you have the right to do this, not paying you what you are due under contract and so on.

Hope this clarifies a bit more?

Customer: replied 3 months ago.
Ok. Can you recommend a UK lawyer who could help me with the cross boarder aspect of this? Obviously I want to keep the costs to a minimum so I will follow all of the steps you suggest leading up to the pursuit of a formal claim in a UK court.

Sadly we are not allowed to recommend anyone, we have to be independent and just advise you of the legal position and rights, but not actually direct you to anyone. However, if you go here:

http://solicitors.lawsociety.org.uk/?Pro=True

And in the area of practice select Private client – international, that should give you some results.

Hello, I see you have read my response to your query. Could you please let me know if it has answered your original question? You can either reply on here with a quick ‘Yes, thanks’, or select 3, 4 or 5 stars on this page. I can still answer follow up questions if needed to clarify anything for you. Many thanks

Hello, not sure if you are having trouble seeing my posts? Do you need any further assistance or are you happy with the response to your query? I look forward to hearing from you. Thanks

Customer: replied 3 months ago.
Hi Ben, Sorry for the delay in responding. Thanks for your help. We are done for now. David

you are welcome, all the best

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