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Does anyone have any practical experience on the UK Small Claims Court?
Thread poster: MariusV

MariusV  Identity Verified
Lithuania
Local time: 08:07
English to Lithuanian
+ ...
May 13, 2015

Dear colleagues,

I have the following situation:

In September and October of 2014 I did several projects for one UK translation agency/company (the company still "operates"). However, when the payment of the first invoice was substantially late, I refused to "credit" them and accept any further work. They got "insulted" and after my refusal they never ever contacted me back - ignored all my emails, phone calls (phoned them at least some 20 times, and each time "the persons/Managing Director was not in the office"), and any communication and any attempts from my side to settle this issue "mutually".

I have the following:

1) Full email correspondence as a proof that they ordered translation jobs from me, information on the volumes, rates, and amounts agreed upon; confirmation that they received my work, and that it was done very well (a copy of their happy clients letter which they forwarded to me); however, I do not have any formal PO (purchase order);

2) I also have emails from their end client - the end client confirms that they paid to the agency for my work;

3) proof that I sent many email reminders, several recorded phone calls speaking to their staff, etc.

Now it became the matter of principle - I am very angry on them not even because they owe me over 800 EUR, but because of their approach. As it turned out to be later, this company is a notorious non-payer, they cheated many dozens of translators like me, and, actually, they never ever intended to pay - their turnover is big, they have half a million of GBP of annual profits, they have contracts with the UK municipality and governmental institutions, and they further cheat their new victims.

THE QUESTION IS - based on all what I wrote above, do I have any chance to win the Small Claims Court if I apply? Because, as far as I got to know, the legal system, and even law enforcement bodies, are somewhat "impotent" in such situations - won't it simply happen that I will spend a lot of extra money for a lawyer, court fees, etc., and it will end in nothing?


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Angela Rimmer  Identity Verified
United Kingdom
Local time: 06:07
Member (2014)
German to English
+ ...
Worth a try May 13, 2015

Sorry to hear about this stress.

PLEASE NOTE: I AM NOT A LAWYER, the following are just my thoughts based on very limited legal knowledge and a conversation with my partner who is a lawyer in the UK.

UK courts are generally OK to deal with and small claims costs are so low (for the amount you are seeking, it would cost approx. £70 in court fees) that it's worth a try. For small claims I don't even think you would really need a lawyer (although it couldn't hurt) because it is relatively straightforward here in the UK.

In the UK, at least, you don't need a purchase order if you have other proof of the order (in this case the emails with the agreed costs, word counts etc.)

You also have proof that you delivered the ordered product and that the client was happy with it. AND you have proof that you sought to collect the money multiple times before involving the court (it looks good that you are using the court system as a last resort).

I think if all of your evidence is permissible in court that you would probably have a strong case. I would also argue strongly for extra money to compensate for the time you have spent chasing the money. Even if the court rejects this, they shouldn't reject the actual cost of the work so it's worth a try.

Some evidence that may not be permissible are the recorded phone calls. That is a question of whether the other party knew they were being recorded, and even then I think there is something that prevents most recorded conversations from being used as evidence in court.

Do you have professional liability insurance? If so, you should seek advice from them, as they usually provide legal advice for situations like this.

Another thing to consider: if they are doing this to a lot of other suppliers, you might be able to file a class action lawsuit (also known as group litigation) if other suppliers are willing to team up. This approach is much more complicated, but if successful, might be effective in stopping this agency from exploiting others in future.

EDITED TO ADD ANOTHER OPTION:

You could send a letter to the company requesting their legal details (which they are required to provide) and stating your intent to sue. That may be enough for them to pay the amount due without even having to involve the courts.

[Edited at 2015-05-13 21:00 GMT]


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MariusV  Identity Verified
Lithuania
Local time: 08:07
English to Lithuanian
+ ...
TOPIC STARTER
Thank you very much May 13, 2015

Angela Rimmer wrote:

Sorry to hear about this stress.

PLEASE NOTE: I AM NOT A LAWYER, the following are just my thoughts based on very limited legal knowledge and a conversation with my partner who is a lawyer in the UK.

UK courts are generally OK to deal with and small claims costs are so low (for the amount you are seeking, it would cost approx. £70 in court fees) that it's worth a try. For small claims I don't even think you would really need a lawyer (although it couldn't hurt) because it is relatively straightforward here in the UK.

In the UK, at least, you don't need a purchase order if you have other proof of the order (in this case the emails with the agreed costs, word counts etc.)

You also have proof that you delivered the ordered product and that the client was happy with it. AND you have proof that you sought to collect the money multiple times before involving the court (it looks good that you are using the court system as a last resort).

I think if all of your evidence is permissible in court that you would probably have a strong case. I would also argue strongly for extra money to compensate for the time you have spent chasing the money. Even if the court rejects this, they shouldn't reject the actual cost of the work so it's worth a try.

Some evidence that may not be permissible are the recorded phone calls. That is a question of whether the other party knew they were being recorded, and even then I think there is something that prevents most recorded conversations from being used as evidence in court.

Do you have professional liability insurance? If so, you should seek advice from them, as they usually provide legal advice for situations like this.

Another thing to consider: if they are doing this to a lot of other suppliers, you might be able to file a class action lawsuit (also known as group litigation) if other suppliers are willing to team up. This approach is much more complicated, but if successful, might be effective in stopping this agency from exploiting others in future.

EDITED TO ADD ANOTHER OPTION:

You could send a letter to the company requesting their legal details (which they are required to provide) and stating your intent to sue. That may be enough for them to pay the amount due without even having to involve the courts.

[Edited at 2015-05-13 21:00 GMT]



Dear Angela,

Thank you very much for your detailed info and help.

May I ask you something more? Will I need to go to the court "physically"? Because it will involve additional costs - a flight ticket, hotel, etc.? E.g. in my country such small cases and proceedings are done in writing (i.e. the courts are overloaded with work and "physical presence" is needed only for serious cases, mostly criminal cases, or civil cases when it involves complex issues)?

And how "fast/slow" the UK courts are? E.g. if I file the claim next week, may I might expect the hearing of the court and its decision (whatever it is) within 6 months or so?

Can I also ask the court to initiate bankruptcy to that company? And/or ask for some "protective measures" (e.g. to suspend/freeze their company accounts till the end of the court process)?


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Sheila Wilson  Identity Verified
Spain
Local time: 06:07
Member (2007)
English
+ ...
UK SCC if both parties are based there May 13, 2015

I don't believe you can use it if your business isn't based there. However, you can raise an EU payment Order.

I once completed one of those online and saved it. I then emailed it to my non-paying client in another EU member state to inform him of my intent. He paid immediately. I also successfully used the French SCC when both I and my client were based there. It was very cheap and the client paid all legal costs (so I got mine back) plus interest. That client ended up paying out twice the invoice amount. Both procedures can be done online.

So it can work, and you've got every chance of getting paid. You'll need to be patient though. Apart from the EU courts route you could look for a recovery company in the UK. They'll normally take a percentage of what they collect (30%?).

I advise you to send a final demand to the invoice address, getting the post office to provide you with proof of their acceptance of the letter. That's generally accepted as the best proof that they've been given every chance to pay and are simply refusing. That may even be enough to get them to pay.

Lastly, do alert the rest of us by posting a negative entry on the Blue Board here.


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Anton Konashenok  Identity Verified
Czech Republic
Local time: 07:07
English to Russian
+ ...
You may not need Small Claims May 14, 2015

Marius, in this situation you may be able to work it out without the Small Claims Court. As you are also based in the EU, you can use a convenient arrangement called European Order for Payment. Essentially, you file for it in your home country, and it is enforced in defendant's country unless the defendant contests it - and the kind of proof you have makes contesting it hardly reasonable. A description is e.g. here.

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Tom in London
United Kingdom
Local time: 06:07
Member (2008)
Italian to English
They still don't pay May 14, 2015

I don't know anything about the Small Claims Court but I wouldn't pin my hopes on it. I've read that even if a claim is awarded in your favour, the guilty party often still doesn't pay - in which case your only option would be to take up an incredibly expensive personal claim.

If someone hasn't paid you, I would suggest that a better alternative would be to look around for a credit recovery agency; preferably one that's based as near as possible to the non-payer, and has a website that describes the steps they will take, unless s/he pays PDQ.

I've had to do this on several occasions (though not in the UK) and in every case, I received payment immediately.

You need to come down heavily on people like this, and get your money FAST. You need to FRIGHTEN them into paying you.

"Ordinary people have access to the courts in the same sense that Christians in ancient Rome had access to the lions." - Judge Earl Johnson Jr


[Edited at 2015-05-14 08:04 GMT]


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Peter Shortall  Identity Verified
Local time: 06:07
Member
French to English
+ ...
A couple of thoughts May 14, 2015

I have no experience of resorting to the SCC myself (although I've mentioned the possibility to a couple of clients who seemed very reluctant to pay, and they both paid immediately!) But I have a couple of thoughts about your situation.

Given the possibility that they never intended to pay (I know there are agencies like that out there), I'm a bit surprised that they confirmed receipt of your work. I'm also surprised that they forwarded a letter of satisfaction from their client to you, as this makes it very difficult for them to use poor quality as an excuse for non-payment. Why did they do that? Did you ask for the letter, or did they voluntarily send it to you?

You say that you have managed to obtain confirmation from the end client that it paid the agency for your work. Assuming you contacted the end client directly to request that, does the agency know that you contacted the end client directly? I just wonder whether you signed a non-circumvention clause with the agency as part of a non-disclosure agreement, i.e. a promise that you would not contact their end clients directly. Some agencies require that. Did that happen in this case? Because if it did, there's a risk that the agency might take - or at least threaten - action against you. If not, fine, but they sound like a rather devious agency, so you may need to be careful. Whether or not the end client paid the agency should have no bearing on your dispute with the agency in any case - your contract was with them, not the end client.


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MariusV  Identity Verified
Lithuania
Local time: 08:07
English to Lithuanian
+ ...
TOPIC STARTER
answers May 14, 2015

Peter Shortall wrote:

I have no experience of resorting to the SCC myself (although I've mentioned the possibility to a couple of clients who seemed very reluctant to pay, and they both paid immediately!) But I have a couple of thoughts about your situation.

Given the possibility that they never intended to pay (I know there are agencies like that out there), I'm a bit surprised that they confirmed receipt of your work. I'm also surprised that they forwarded a letter of satisfaction from their client to you, as this makes it very difficult for them to use poor quality as an excuse for non-payment. Why did they do that? Did you ask for the letter, or did they voluntarily send it to you?

You say that you have managed to obtain confirmation from the end client that it paid the agency for your work. Assuming you contacted the end client directly to request that, does the agency know that you contacted the end client directly? I just wonder whether you signed a non-circumvention clause with the agency as part of a non-disclosure agreement, i.e. a promise that you would not contact their end clients directly. Some agencies require that. Did that happen in this case? Because if it did, there's a risk that the agency might take - or at least threaten - action against you. If not, fine, but they sound like a rather devious agency, so you may need to be careful. Whether or not the end client paid the agency should have no bearing on your dispute with the agency in any case - your contract was with them, not the end client.




The receipt of my work was confirmed by their PM, who was a decent person and who left the company soon...

No, the agency did not know. But I never signed anything for them regarding this. Considering the fact that I was unpaid for my translation, meaning I was the owner of the translation, I had the right to contact "third parties" who used my property without my consent. And yes, this is was the answer from the end client that "sorry about your situation, we did not know anything about that, we paid to the agency as they provided us the services in due time and quality"...

And about the approach of the agency. It seems they do not even damn care about anything. They operate as two "separate" companies - one company delivers translations and receives payment from the clients; yet another - orders the work from translators and never pays them - as soon as the second company reaches a certain level of debts, they declare it "under liquidation" and then "bankrupt"...And, formally, these two companies are separate legal persons - you cannot demand your money from the first one...Then they establish a new company (as far as I know, it just takes a couple of days and costs some 100 GBP to make a new company in the UK), and so on...


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Richard Foulkes  Identity Verified
United Kingdom
Local time: 06:07
German to English
+ ...
My only experience... May 14, 2015

Was threatening a direct client with SCC when payment was 2 months overdue. They settled the invoice within days (though they claimed there were 'mitigating circumstances' so the payment was not directly attributable to the threat of SCC).

Perhaps a suggestion of SCC action will prompt your client to pay up? But be ready to go through with it as it sounds like they've had enough leeway. Good luck with recovering your debt.


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Peter Shortall  Identity Verified
Local time: 06:07
Member
French to English
+ ...
Prepare for a hard battle May 14, 2015

MariusV wrote:

And about the approach of the agency. It seems they do not even damn care about anything. They operate as two "separate" companies - one company delivers translations and receives payment from the clients; yet another - orders the work from translators and never pays them - as soon as the second company reaches a certain level of debts, they declare it "under liquidation" and then "bankrupt"...And, formally, these two companies are separate legal persons - you cannot demand your money from the first one...Then they establish a new company (as far as I know, it just takes a couple of days and costs some 100 GBP to make a new company in the UK), and so on...



I see, well that's good if you didn't sign a non-circumvention clause.

That business structure sounds like it was designed by a very devious person! Oh dear. And you say they've worked for government institutions. I don't like the sound of that, actually. I've come across dodgy companies that have worked for the government (albeit not in the translation sector) before, the people who run them can be nasty pieces of work. They know how to charm, persuade and deceive at the same time!

I hope I'm wrong, but I have a feeling that they won't pay even if a small claims court judgment goes against them. I wonder whether it's possible for you to find out if there are any previous judgments against the company or the person who owns it, e.g. county court judgments, but unfortunately I don't know if or how you could do that. It might be worth looking into that, because if the company/person you dealt with is still in business after losing court cases, that might suggest your efforts are likely to go unrewarded. Unfortunately there are some crooks out there who manage to avoid paying, despite the best efforts of the courts.

In any case, please keep us posted on how the situation turns out and good luck! And as Sheila suggests, please do make a BB entry if you haven't done so already.


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Tom in London
United Kingdom
Local time: 06:07
Member (2008)
Italian to English
Threaten May 14, 2015

Richard Foulkes wrote:

Was threatening a direct client with SCC when payment was 2 months overdue. They settled the invoice within days (though they claimed there were 'mitigating circumstances' so the payment was not directly attributable to the threat of SCC).

Perhaps a suggestion of SCC action will prompt your client to pay up? But be ready to go through with it as it sounds like they've had enough leeway. Good luck with recovering your debt.


Yes; threatening people isn't usually a nice thing to do, but in cases like this it's the RIGHT thing to do, if you want a quick result. Matters like this need to be resolved firmly and swiftly, and you need to find out how to do it - because (I'm sorry to say) it WILL happen again.


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MariusV  Identity Verified
Lithuania
Local time: 08:07
English to Lithuanian
+ ...
TOPIC STARTER
They are not afraid of any threats May 14, 2015

I wrote at least some 20 email reminders, phoned them 15 or 16 times (asking to speak to the person in charge of the payments/debts, or the Managing Director and each time both of them were "unavailable"), sent them 2 formal reminders, and 1 final formal reminder. No response, and no one is "afraid" of those "threats"...And after some research I did, it turned out to be that there are at least several dozen of their victims and the amounts they owe are from several hundred up to several thousand GBP/euros. Even their office staff was left unpaid - one girl worked as their PM for two months and has not received a single penny for her salary.

Btw, yesterday one of their victims shared with me some information that they wrote to her telling to stop posting negative comments on Facebook and LinkedIn and they threatened her with legal action for "damaging of the reputation"...Just imagine that...


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Tom in London
United Kingdom
Local time: 06:07
Member (2008)
Italian to English
Threats May 14, 2015

They are not afraid of any threats from you, but they would be afraid if they had a knock on their door from someone large and overbearing. Find yourself a credit recovery agency, as I was saying. It works.

You need to find one that takes a step by step escalating approach that begins with a polite letter and ends with a doorstep visit by bailiffs empowered to enter their premises and seize their property (although you will probably find that you've been paid in full, plus your expenses. long before it gets to that stage).

After 5 minutes with Google I found this one, which looks promising:

http://www.firstcapitol.co.uk/services/debtrecovery

You need one with a website that's aimed not at you, but at the non-payer. Something that puts the fear of God into them. You need to not be worrying about this; you just need to have it dealt with.

Chop chop !

[Edited at 2015-05-14 10:18 GMT]


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MariusV  Identity Verified
Lithuania
Local time: 08:07
English to Lithuanian
+ ...
TOPIC STARTER
This is what my topic was about May 14, 2015

Peter Shortall wrote:

MariusV wrote:

And about the approach of the agency. It seems they do not even damn care about anything. They operate as two "separate" companies - one company delivers translations and receives payment from the clients; yet another - orders the work from translators and never pays them - as soon as the second company reaches a certain level of debts, they declare it "under liquidation" and then "bankrupt"...And, formally, these two companies are separate legal persons - you cannot demand your money from the first one...Then they establish a new company (as far as I know, it just takes a couple of days and costs some 100 GBP to make a new company in the UK), and so on...



I see, well that's good if you didn't sign a non-circumvention clause.

That business structure sounds like it was designed by a very devious person! Oh dear. And you say they've worked for government institutions. I don't like the sound of that, actually. I've come across dodgy companies that have worked for the government (albeit not in the translation sector) before, the people who run them can be nasty pieces of work. They know how to charm, persuade and deceive at the same time!

I hope I'm wrong, but I have a feeling that they won't pay even if a small claims court judgment goes against them. I wonder whether it's possible for you to find out if there are any previous judgments against the company or the person who owns it, e.g. county court judgments, but unfortunately I don't know if or how you could do that. It might be worth looking into that, because if the company/person you dealt with is still in business after losing court cases, that might suggest your efforts are likely to go unrewarded. Unfortunately there are some crooks out there who manage to avoid paying, despite the best efforts of the courts.

In any case, please keep us posted on how the situation turns out and good luck! And as Sheila suggests, please do make a BB entry if you haven't done so already.


Yes, I have the same bad feeling and considered if it is worth spending more money, time, and energy on that. Because they already owe me a lot, then I apply to the court, pay court fees, I might probably need a lawyer (at least for some "basic advice" on a minimum cost), then, who knows, maybe I will have to fly to the UK, spend several days paying for the hotel, and even if I win the case and the court, they do not pay...OK, I have a debt collector who told me that under such circumstances the only way possible is to by to the court and have the decision of the court. They know good bailiffs and when/if I have the decision, I bailiffs will to their work well. However, they already opened (two months ago) a new company from their "Phoenix company" scheme and I have a bad feeling they are preparing that "debtor" company for "bankruptcy"...

One more issue - would it be possible to prove their criminal scheme with those companies? Because it is not the case when someone just had a bad luck in business and owes money to several of his service providers/suppliers. This was done intentionally, and on a massive scale. Moreover, their PMs work as "volunteers" formally (they do not sign any employment contracts with them and then after a month or two "throw them away" without paying a single cent, and take new ones)...And I am almost sure they do "fake accounting" which shall by itself be a serious crime under any laws of any country...


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Tom in London
United Kingdom
Local time: 06:07
Member (2008)
Italian to English
Slow, slow, quick quick slow May 14, 2015

You can resolve this matter quickly and move on, or you can let it snowball and take over your life. Your choice. If you follow that link I posted you get a lawyer, small claims court, bailiffs, your money back, and all your expenses paid. It's a one-stop shop. You don't need to be here in the UK. And my link was only one suggestion after 5 minutes with Google.

Pardon my insistence but I just *hate* to see a fellow-translator not getting paid, and I have a passion for seeing these things resolved quickly.

[Edited at 2015-05-14 10:29 GMT]


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