So you’re a developer who has been working with an agency successfully for a while. They find you the work, you do the work, and they take out the hassle of getting paid. Life is sweet. Then the payments stop. What do you do?
Agencies are likely to have some fairly favourable terms of contract, whether or not you noticed them at the time you signed them. You might have noticed the restrictive covenants saying that the agency’s clients are their clients and you cannot work for their clients directly, but there might also be other provisions that you need to be aware of before you are able to work out what your negotiating position is and what your options are.
First stop when you have not received payment is to call your agency and ask whether there is a problem: you submitted your invoice on time the work has been done and you’re entitled to be paid. What gives? What you do then depends on the response from the agency.
A common response is that there has been a mistake and payment is on the way; on the other extreme you might receive the silent treatment, where there is no response at all to messages to your contact.
If you have done what has been required of you to be paid, there are a series of steps you are able to take to improve your position if things turn sour.
After you have spoken with the agency to find out what the problem might be, as stated above, those reasons need to be reduced to writing and put to them. You might find that the agency has more of a problem changing its position once it is in recorded writing. Assuming that they do in telephone calls, it makes sense to email them after the call again and record what was said in a polite, friendly and understanding tone.
After a time has passed, you will generally have a picture of the reasons why payment is not forthcoming. It is at that stage that you are presented with the choice of continuing to work with the agency, or walking away. Another question entirely is whether you take formal steps to recover the debt. If you do decide to go down that road, there is Money Claim Online which provides an excellent online service, the agency’s local County Court to commence legal proceedings, or a statutory demand.
Leigh Ellis is a solicitor based in London advising businesses and on technology & IT contracts and businesses disputes. As a software developer, commercial contracts and intellectual property specialist with over 10 years’ experience as a commercial lawyer, he is well placed to assist businesses resolving commercial disputes.