Barring the Managing Director of course who I’m still yet to hear one nice word said about (most people warrant a ‘Nah, he’s alright’ from someone but not this bloke). Had he cared even five per cent as much as his staff, this may not have happened. Now they’re all out of jobs and there is a huge gaggle of unpaid freelances, who have helped him sell his magazine, out of work and out of pocket.
And just to reinforce what a one-sided ass UK company law is, he’s already set up another company (having saved one of his three magazines) which should buy him another few years of being an MD and not paying his writers. So he’s fine thankyouverymuch.
So, yes, I should have seen this coming from the lack of response to emails, the mounting unpaid invoices and ignored red statements I sent. And, yes, I should have acted sooner to take the matter to the small claims court. But I didn’t and now I’m poorer for it so what can you do if you find yourself in a similar situation?
How to get the money you’re owed:
1. Call, call and call again. Emails are easily ignored so get on the phone to the person responsible for paying you. Yes, you may come across as a pain in the arse to the accounts department but this is work that you have done and have not been paid for. If you were in a full-time position would you accept your boss not paying you your monthly salary? Of course not, and let’s not forget that the ebb and flow of money as a freelance makes your finances uncertain enough. Even if you’re only owed the money for a single invoice, chase it as soon as payment becomes overdue.
2. Speak to the editor. You may be locked away in your bedroom-based freelance ‘office’ but more often than not the person that commissions you shares the same office as, and hopefully commands some respect from, the person responsible for paying you. A word from them could speed up payment of your hard-earned fee and ensure you can pay the bills that month.
3. Stick religiously to payment terms. Under UK law you are entitled to payment within 30 days. Stay on top of this as you don’t want to create the impression that you’re one of the writers that’s happy to wait for payment. You did the work, you want your money! Email a statement of outstanding fees immediately (attaching relevant invoices) and follow up with a phone call. Most clients you work for will respect this nudge and pay immediately. Under the Late Payment of Commercial Debts (Interest) Act 1998, you can also charge 12 per cent PA on any invoices that are not paid within the 30 day period.
4. Withhold copy. You may fear that this will upset the editor of the magazine you are writing for but any editor worth their salt should understand that you work hard and deserve to be paid on time for your efforts. Without copy, there is no magazine; a fact that should resonate with the person responsible for paying your wages as the magazine also pays theirs. Call the editor to let them know that this is what you have been forced to do – some editors have little or no idea that their writers are not being paid so if you fail to tell them why you’re not sending your copy through, you’ll just look tardy and unprofessional.
5. Send a Letter Before Action (LBA). The clue is in the name. This is the first step towards starting court action to get the money you’re owed. The letter gives the company a fixed amount of time (usually 14 days) to respond before court action is instigated. See the links below for template letters or how to get a solicitor to send the letter for you on headed paper (this carries more weight and can cost as little as £2). 6. Court action*:
- Small claims court – once the LBA period has passed, then you can proceed with taking the company to court. This will initially cost you the court fees (which vary depending on the amount you’re claiming) but the defending company is liable to pay these if the case is settled in your favour. You are also able to charge the defending company interest on the money you are owed and claim this back.
- Winding up petition – any court action is risky if you want to keep the client but the chances are if you have to go to these lengths you’re probably just interested in getting your money back. You can apply for a winding up petition against a company which basically involves saying that if the company cannot pay its debts then it should no longer be trading. More information on winding up can be found here: http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1073791109&type=RESOURCES
*IMPORTANT: Before taking court action, check to see if the company has already been placed in administration (see Companies House). If you begin court action while the company is going through this process, you may end up being liable for the court fees that you would normally reclaim as part of the settlement.
7. Contact the administrators. If the worst comes to worst and the company has been placed in administration (you can check this on the Companies House website) then you should contact the administrator (details also on Companies House) so that they can list you as one of the creditors. Be aware that your claim will come quite near the bottom of the list below those with larger claims such as suppliers. You may end up getting a token percentage of what you’re owed (say a penny for every pound you’re owed) and may well end up with nothing but if the administrator doesn’t know you are owed money then they cannot account for you when it comes to handing out the money raised from selling the company’s assets.
Related links:
Companies House: http://www.companieshouse.gov.uk/
How To Get Paid On Time article on journalism.co.uk: http://www.journalism.co.uk/news-freelance/how-to-get-paid-on-time/s12/a51656/
Template letters and advice: http://www.justclaim.co.uk/index.php?file=/procedures/index.page
Thomas Higgins solicitors: http://www.thomashiggins.com/
Winding up petitions explained: http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1073791109&type=RESOURCES
NOTE: I AM NOT A SOLICITOR and have no legal training. The above guidelines relate to the UK and are just that: guidelines that should not be taken as legal advice. If you have any queries about any of the above or are considering taking a company to court, please contact a solicitor. This need not be expensive and there are companies, such as Thomas Higgins, that specialise in this area and can complete the whole process relatively inexpensively.
Originally posted on http://blog.ianroullier.com on 13 August 2011.
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