Agency disputing payment of invoice

[ITDEVCONTACTOR]

Hi,

I am an IT contractor, specialising in software development with a limited company. I was recently working through an recruitment agency who were supplying me to a client. The client unfortunately went into administration during my time there and as a result, the agency are withholding my final invoice of around £10,000. This was signed by the manager as usual and submitted in the normal way to the agency.

The agency are owed other sums from the client and as a result are not prepared to suffer any further losses. Other contractors on the team who were with other agencies have not experienced any problems and the agencies just paid. As far as i am aware at this point in time, my contract was with the agency and not the client, so i believe they are responsible for making the final payment.

I have been through this site for guidelines and looked at the steps of possibly using a debt collection agency as a first step but as this has already been disputed by the agency, not sure if this is even worth starting. I also read the courts don't take kindly to just going straight for a legal solution but i am not sure what else to do as we have exhausted emailing and conversations over the phone. The agency have been polite but are not intending on paying unless they absolutely have to, which wasn't the best news to hear when i was under the impression i was more protected using an agency than going direct to a client.

Looking for the best 'Next Step' and possibly a recommendation of a law firm who specialise in this type of problem?
Have more details but didn't want to swamp the initial request.


Many Thanks,

[stek]

Opted in or opted out?

[northernladuk]

Opted in or opted out?

Depends if there is a clause saying the agency would only pay you if they have been paid by the client wouldn't it? The opt in/out status would only say the agent has to pay you regardless of any timesheets but the client paying the agent clause would trump that?

When you say they are withholding your final invoice, if they only pay you if they get paid they are technically withholding it, unless they've been paid and are keeping it to cover their loses first which would be completely wrong of them. How you would actually prove this I don't know.

You can't chase the client as you have no contractual relationship with them so that's not going to work. It's the agency you have to chase and their clauses could mean that's a dead end as well.

Something on your situation here..
What contractors should do if their agency or client goes bust

Your IPSE+ membership should cover you shouldn't it?

I don't think it would be a bad idea to contact someone like Safe Collections who posts on here. They will tell you where to look and what evidence you need to be asking for. For example if the client paid your invoice and not other invoices you should get paid but they'll be able to advise what evidence you can get etc etc.

[northernladuk]

Just a question, there was no indication your client was going to go belly up?? Nothing at all?

[teapot418]

Your IPSE+ membership should cover you shouldn't it?

Not sure about that - it covers £10K for client going bust if you're direct with client, and agency going bust if you're through an agency.

Maybe £1000 for failing to honour contract, depending what the contract says, which I guess is key here. Probably worth giving them a ring if you might be covered.

https://www.ipse.co.uk/about-us/busi...ption-services

[WTFH]

Have you searched for the agency on here to see if anyone else has had issues with them?


Make sure you have everything in writing from the agency and if possible from the end client as well, then consider getting legal advice.

[BlasterBates]

A good idea to take legal advice, unless there is a clause in the contract that explicitly states that payment is contingent on payment from the client, I would say the agent needs to pay.

[Contreras]

Depends if there is a clause saying the agency would only pay you if they have been paid by the client wouldn't it? The opt in/out status would only say the agent has to pay you regardless of any timesheets but the client paying the agent clause would trump that?

The "paid when paid" clause is only valid for opted-out status (if you trust that the legislation applies at all).

Without a timesheet the agency must seek other evidence, which it seems they have already so there is no case to answer. A debt collection agency would know the right buttons to press to make them see sense on this.

However, was an opt-out signed, or not?

[MrMarkyMark]

A debt collection agency would know the right buttons to press to make them see sense on this.

Yep, I would engage one straight away.
Opt, Opt out may have relevance, although, in reality, this is extremely unclear.

Recently we have had posts saying there is no risk to contracting, "None payment never happened to me" etc. etc.
Well worth credit checking, before you agree to enter into contract with an agency, iMO.

[TheFaQQer]

Depends if there is a clause saying the agency would only pay you if they have been paid by the client wouldn't it? The opt in/out status would only say the agent has to pay you regardless of any timesheets but the client paying the agent clause would trump that?

No - contract doesn't trump statute. So if you aren't opted out correctly, then they have to pay you regardless of whether they get paid or not.

As long as you can show that you did the work, they have to pay up - which is one big reason why the agencies hate those that aren't bullied into opting out.

Your IPSE+ membership should cover you shouldn't it?

I would expect so - the website talks of "Up to £10000 compensation for failed payments" so I'd get on the phone quickly if you're a member.