It is amazing the lengths some businesses will go to to avoid paying a bill!

I undertook some audio transcription work for a firm who are now refusing to pay me on the grounds that the person who instructed the transaction has left the company and did not have any authority to instruct us. We have a signed agreement form from the now ex-employee, along with full copies of all correspondence between us.

It's not a massive bill, but I have to say I am incensed at the blasé attitude of the partner of the company, when all we did was provide transcription services in good faith.

I know the chances are that I will have to chalk this one down to experience; however I would like to know what I can do to prevent a similar event taking place again, so thoughts, ideas, etc gratefully received!

I've included the email chain below with all identifying information removed…

From: 'Solicitor'
Sent: 01 July 2009 14:14
To:
By e-mail

Dear Madam

INVOICE NUMBER xxx

We have been instructed by 'Partner's name' of Client company' to write to you as to your alleged outstanding invoice xxx.

'Employees name' had no authority from our client to issue any instructions in respect of the work for which you are alleging payment is outstanding. 'Employees name' was instructed to deal with the work herself.

Yours faithfully

Solicitor

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Good afternoon 'Partner's name',

I have recently received the correspondence below from Solicitors name' in connection with our outstanding invoice xxx.

Firstly, I am intrigued as to why you felt the need to instruct a solicitor at this stage, it seems rather an excessive option for an invoice of £xxx. However, in response to the email below, Employees name' instructed us to act on your firms behalf to cover secretarial duties which we performed as per the agreement. The work was completed, accepted and used by your firm, and therefore this invoice still stands.

We are in possession of all correspondence relating to this transaction, including the signed & accepted work request form which clearly sets out our terms and conditions of service.

Therefore, I would appreciate swift settlement of this invoice, within the next seven days, to avoid further proceedings and the application of late payment charges and compound interest to the total.

Very best wishes

Kerry Anne Orr

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Dear Kerry
Thank you for your correspondence
1 The reason for using xxx Law is because i can
2 The client company has always paid its genuine bills on time However as already explained 'employee's name' had absolutely no authority to enter into any agreements with any outside parties without my express permission which as far as your company is concerned she did not have Therefore you may wish to take this up with 'employees name' personally Finally can you please if you are intent on pursuing this alleged bill please deal directly with 'solicitor'
Regards
'Partner of firm'

Jeez Kerry , I cant help you factually but will be interested in those that can.

Best of luck on this

Me too. I'm amazed that any company would try to weasel out of a payment like that. Surely it's their problem what their employees do.

I know nothing of the legalities of this, but did they use the work you provided? If so, as the said person wasn't authorised to instruct you, were they authorised to use your information? Just a thought!

Hi Kerry,

Sorry to hear of your predicament.

I would have thought that as long as you believed the employee had the authority then the company is liable for the bill. Otherwise are we to do a companies house search on everybody we work for.

You have fulfilled your terms of the contract, which his company has ultimately benefited. Again, I would think that his company should pay for these services but if anybody should pursue the former employee it should be him and not you.

Hopefully, someone with the relevant legal background will back me up on this. I would continue to pursue the employer rather than the solicitor just to make him as frustrated as you.

Cor, brilliant question Charmian.... did the company get the value of the work done? I don't know how you'd get a truthful answer to this, but it is a great question!

Of course you can always employ Steve White to sort them out.

I would love to hear from the Steve White contingent on this one. My understanding was that as you acted in good faith you would be ok.

However, I have no professional formal knowledge in this arena.

The company clearly are not honourable. Sad really. I am not sure how you protect yourself against this kind of thing. Bad debts are increasing again. It used to be like this in the 80's, but for a while got a lot better.

Sorry, but anyone who puts this in a business letter is an idiot.

It may only be a small bill and you may not get it back but I would make sure you make them pay for it because you can.

I heartily agree - good luck hon!

Kerry, I feel for you. We've had a similar experience recently. Steve White (of said Steve White fame) wrote a nice letter on our behalf and low and behold payment was made, pronto! Get him on the case x

Practically it is a messy one as it costs you time and energy in fighting a business who thinks it OK to behave like this. The law here is based on what is reasonable.

The employer will be liable if you can prove that the employee would reasonably be expected given her position to have the scope of the authority to order such services from you.

It seems on what you are saying that it was entirely credible.

Under contract law, where an employer has clearly benefited from the services and those services are ordered within the scope of the employee's job role, then, unless you are told to the contrary that the employee has no contractual authority, it is reasonable to assume the employee does have the authority. Case law shows this over the last 150 years in your favour.

What the solicitors' letter does tell you is they are prepared to fight the case, how far they will go is another question and I would be inclined in this one to issue a letter before action to the client and their solicitors and if nothing is forthcoming issue in the County Court. Even if defended it is worth a punt at getting this before a judge, most will see it for the sham it is. If you have the stomach for it there is a good chance with your paperwork in brilliant order that you will succeed on this one.

Time also to get your terms and conditions up to spec, get them reviewed and also include in them a clause which binds the person signing to confirm they have specific authority to contract on behalf of their company or in future only get partners and directors signatures.

Hi Kerry

I am so sorry to hear that you have found yourself in this unfair predicament! I think that the advice above is excellent though and unfortunately is a hard lesson to have to learn with businesses like that out there - it has certainly made me think about the issues!

I am no solicitor and certainly not legally trained to give advice on this matter but on a personal level I have to say though that I would take steps to chase the debt further and agree that you should maybe look to go down the County Court route - I guess it all depends whether you feel the costs are worth it. Although for me I would just want to pursue the matter to get justice!

I think you also have to consider that if the solicitor say is just a friend of the partner it maybe that he tries to blag his way out of not paying a number of people and hopes that a solicitor letter will scare people from chasing their debts! You could find if you stand tall against him that he actually caves in!

I wish you the best of luck with this - please post an update on the forum with the final outcome!

All the best

And if all that fails, it would be helpful for the 4N community to know who the company are. Even if they successfully defend your action against them, it is well worth the wider community understanding how they carry out business. Not naming and shaming them for their debt you understand, as that is apparently illegal, but just advising other 4Ners that this company will only pay if named directors sign any contract or agreement.

I am sure the company concerned would be grateful so that the rest of us know not to do business with them without the directors consent.

As a tip, make sure the company and directors names are in the thread title, then it will show up on Google.