Can I take an unrelated local office of a delinquent multinational client to US small claims court?
Thread poster: Adieu

Adieu  Identity Verified
Russian to English
Feb 28

I have a certain big multinational client that as it turns out is surprisingly irresponsible when it comes to paying on time. One payment is now 9 days late. When contacted the Monday after a missed Friday payment, they claimed to have just sent it out that day (with no explanation why they missed the original due date) and promised it would arrive by Wednesday...It never arrived and still shows "unpaid" in their system.

Tomorrow will be a week later.

Since then, they'v
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I have a certain big multinational client that as it turns out is surprisingly irresponsible when it comes to paying on time. One payment is now 9 days late. When contacted the Monday after a missed Friday payment, they claimed to have just sent it out that day (with no explanation why they missed the original due date) and promised it would arrive by Wednesday...It never arrived and still shows "unpaid" in their system.

Tomorrow will be a week later.

Since then, they've kind of ghosted me.

Now, I realize that it is far too early to start suing them, but they will owe me a second payment also, and I am wondering what to do next if this turns out to be a bit more difficult than some unreliable slackers in their accounting department.

They owe me ~$3k total. If it gets nasty, seems perfect for US small claims court and there is SOME kind of local office of the company 3 miles from my home address, just NOT at all the office I worked with. COULD one just ignore that fact and sue their local representative????
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Dan Lucas  Identity Verified
United Kingdom
Local time: 06:24
Member (2014)
Japanese to English
Unlikely Feb 28

Adieu wrote:
there is SOME kind of local office of the company 3 miles from my home address, just NOT at all the office I worked with. COULD one just ignore that fact and sue their local representative????

Almost certainly not. Likely to be very different legal entities.

Even if you think they're not going to pay, you have to wait until they haven't, and sue the legal entity that isn't paying. If it's just that they are slow payers - deliberately, perhaps - and you are not prepared to accept that, then decline any further orders and cut ties. You're highly unlikely to get them to change their practices.

I know one UK translator who says he has often initiated small claims proceedings against UK clients (it's an inexpensive online procedure in this country), and that the clients then pay quickly and in many cases still come back and give him orders. But I'm skeptical it would work with most clients.

Dan


Teresa Borges
Oleksandr Ivanov
Yaotl Altan
Edward Potter
 

Adieu  Identity Verified
Russian to English
TOPIC STARTER
So... how late is "acceptable" for a European company? Feb 28

I'm used to late Russian small businesses.... because they are after all Russian small businesses (lol) and considering the general scofflaw legal climate there.

Big rich European multinationals were supposed (?) to be different.

At what point does incompetence end and malice begin for a delinquent European client?

How lenient should I be before unleashing a barage of demand letters and burning bridges with a shame-by-name internet campaign?

[Edited
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I'm used to late Russian small businesses.... because they are after all Russian small businesses (lol) and considering the general scofflaw legal climate there.

Big rich European multinationals were supposed (?) to be different.

At what point does incompetence end and malice begin for a delinquent European client?

How lenient should I be before unleashing a barage of demand letters and burning bridges with a shame-by-name internet campaign?

[Edited at 2021-02-28 16:35 GMT]
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Dan Lucas  Identity Verified
United Kingdom
Local time: 06:24
Member (2014)
Japanese to English
How long is a piece of string? Feb 28

Adieu wrote:
How lenient should I be before unleashing a barage of demand letters and burning bridges with a shame-by-name internet campaign?

If they're going to pay you anyway, what's the point in doing that? If you're really short of money right now then it's understandable that you would want it more quickly, but actions like those you mention will, as you say, burn bridges. Even if you don't want to work with them again, I would avoid that.

To be frank, I don't think a nine-day delay is a big deal. This client may be habitually and deliberately late by 2-4 weeks. It's reprehensible, but it happens. Not paying their suppliers until they themselves get paid is one of the ways larger businesses ensure their cash flow is healthy. You certainly don't have to like it, and ultimately you don't have to live with it, but you do need to think dispassionately about how much you need the work.

The other, practical, issue is that if you have a steady flow of business from them every month, once you've been working with them for 8-10 weeks you will be getting payments every month. At that point the fact that the payment that just hit your account belongs to December 2020 rather than January 2021 will be mostly academic. You'll still be getting paid every month, provided that incoming orders continue.

If the client still hasn't paid after (say) three months then the situation takes on a different complexion: maybe they - and by extension, you - are in trouble. You might want to check their rating with a credit agency like Experia and see if there has been any recent deterioration. If this aspect worries you, then decline work until existing invoices have been paid.

Dan


Chris S
Teresa Borges
Kevin Fulton
Philip Lees
Joe France
Tina Vonhof
Kardi Kho
 

Teresa Borges
Portugal
Local time: 06:24
Member (2007)
English to Portuguese
+ ...
@Adieu Feb 28

What do you mean exactly by “surprisingly irresponsible when it comes to paying on time”? Is this the first time or are they always late or occasionally late? (by the way, in my book big multinationals tend to pay later than small businesses, even when there is no malice at all, simply because of the way they are organized resulting in a less agile structure).

Kevin Fulton
 

ATIL KAYHAN  Identity Verified
Turkey
Local time: 08:24
Member (2007)
Turkish to English
+ ...
US Small Claims Court Feb 28

I think US small claims court mostly deals with personal issues with limited USD value. For example, someone owes you a sum of money, and you cannot get your money, you owe your landlord some rent, etc. There are no attorneys involved in such cases. These are rather simple cases. You defend yourself. In your case, one side is a big multinational company. I am not sure whether this can be defended as a case in a US small claims court. Folks from US would probably comment.

 

Jean Lachaud  Identity Verified
United States
Local time: 01:24
English to French
+ ...
Small Claims is for local people Feb 28

Yes. Small claims is for local-only plaintiffs or defendant (as in : at least one of them MUST reside in the court county), up to (in NYS at least) $5000 amount. There may be minor variations on a state by state basis.

But the original poster (Adieu) is in California and, surely, knows that already.

It all boils down to the addresses on the invoice, basically.

J L


 

IrinaN
United States
Local time: 00:24
English to Russian
+ ...
Straight to the point Feb 28

You can't take anything unrelated to the court.

 

Nikki Scott-Despaigne  Identity Verified
Local time: 07:24
French to English
Contract law, late payment Feb 28

Firstly, the legal entity you signed the contract with is the party you can pursue for non-payment. Sometimes, the terms of a contract signed with a small company may provide for the main entity to indemnify parties who suffer loss as a result of a defaulting small entity. In other words, the big company may cover the smaller one, but not the other way round.

Secondly, although late payment is always unpleasant and can sometimes cause serious problems, it is certainly not late enou
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Firstly, the legal entity you signed the contract with is the party you can pursue for non-payment. Sometimes, the terms of a contract signed with a small company may provide for the main entity to indemnify parties who suffer loss as a result of a defaulting small entity. In other words, the big company may cover the smaller one, but not the other way round.

Secondly, although late payment is always unpleasant and can sometimes cause serious problems, it is certainly not late enough to take legal action. Not yet. Any court looking at your claim would expect you to take a certain number of steps first. These would include sending a 1st reminder with a set time limit to pay. If that letter has no effect, send a second letter in which you are more formal, and in which you specify the action you will take if you are not paid.

For example, if you get no reply to an e-mail or two, then send formal reminders.

1st letter:
indicate that you have not received payment
remind the client of the deadline
refer to the part of the contract with payment terms and conditions
send a copy of the invoice
refer to the part of the contract setting out penalties and interest for late payment
ask the client to pay within X days

2nd letter:
send this letter with proof of delivery (essential for any legal action you may take)
state that in spite of your previous reminder, no payment has been received
indicate that you are now applying the contractual/legal penalty and/or interest for late payment
ask the client to pay within 48 (business) hours by bank transfer
ask the client to provide you with proof of the transfer having been made
state that if the funds are not on your account within 48 business hours then you will be taking legal action for recovery

Suggestions from experience. However tempting it might be to get cross and to complain about the agency publicly, bear in mind that you will be most efficient if you concentrate your energy on recovering the money. Don't make it a personal issue. It is a business issue, an unpleasant one, but it is a business one. This will help you think clearly and react rationally.

So, to sum up, check the contractual details, then apply them. Don't start any new work for them until they have settled outstanding invoices.


[Edited at 2021-02-28 22:14 GMT]
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Teresa Borges
Tina Vonhof
 

Jessica Noyes  Identity Verified
United States
Local time: 01:24
Member
Spanish to English
+ ...
ProZ.com first Mar 1

I suggest that you take screen shots of their system showing that the invoice is unpaid. This gives you credibility with whatever method you use to pursue payment.

I don't know at what point ProZ.com starts to push non-payers on our behalf. But they did help me when I reported on the Blue Board that a large European company had not paid me for almost a year.
For this non-payment, ProZ.com turned out to be my court of first (and last) instance.


Dan Lucas
Teresa Borges
Vera Schoen
Oksana Weiss
 

Tina Vonhof
Canada
Local time: 23:24
Member (2006)
Dutch to English
+ ...
Mar 1



[Edited at 2021-03-01 16:21 GMT]


 

Michael Newton  Identity Verified
United States
Local time: 01:24
Japanese to English
+ ...
Small claims court Mar 2

I have sued for as much as USD 3,000 in Small Claims Court in the US and won. All you have to do is fill in the paperwork, pay the fee and file. Since when I file, I list the principal, round-trip airfare, hotel, meal, surface transportation, revenue lost from work by appearing in court, etc. It all amounts to a nice chunk of change and they pay.

Dan Lucas
Adieu
 


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