Taking client to small claims court

[LX3]

This is a first for me. Unless in the next week or two my client has a change of heart, I am taking them to small claims court here in the UK, for non-payment of their invoice.

The job dates back to summer 2008, and was a commercial DVD release for a major household name pop singer.

After a couple of years of to-and-fro-ing, and modifying the invoice to address disputed charges, the final straw came today, after the client yelled at me down the phone, telling me they weren't going to pay because they couldn't be bothered. In fact, it was their suggestion that I take them to court.

It's disappointing, but on the other hand it should be educational, as I have never had to make a court claim before. Useful experience for when it happens again.

So I'm posting partly to have a good old moan, and partly to see if anyone has any similar experiences they can share? (naming no names of course).

Note that I'm in the UK. Procedures and law elsewhere are mostly different.

I'll let you know how it goes.

I know this is hardly a newsflash, but recordists beware - there are some real sharks out there, and it's not just small-time acts that will deliberately screw you over.

[boojum]

Good luck. It looks like you are in an awful spot. This quote is true often enough to be scary:

"The music business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs. There's also a negative side."

[John Willett]

Originally Posted by LX3

This is a first for me. Unless in the next week or two my client has a change of heart, I am taking them to small claims court here in the UK, for non-payment of their invoice.

The job dates back to summer 2008, and was a commercial DVD release for a major household name pop singer.

After a couple of years of to-and-fro-ing, and modifying the invoice to address disputed charges, the final straw came today, after the client yelled at me down the phone, telling me they weren't going to pay because they couldn't be bothered. In fact, it was their suggestion that I take them to court.

It's disappointing, but on the other hand it should be educational, as I have never had to make a court claim before. Useful experience for when it happens again.

So I'm posting partly to have a good old moan, and partly to see if anyone has any similar experiences they can share? (naming no names of course).

Note that I'm in the UK. Procedures and law elsewhere are mostly different.

I'll let you know how it goes.

I know this is hardly a newsflash, but recordists beware - there are some real sharks out there, and it's not just small-time acts that will deliberately screw you over.

Good luck Paul, I hope you win.

Do your invoices say that you retain all rights until the invoice is paid in full?

If so, and they have released the DVD, I think you will find that royalties may be due to you as well.

Good luck, we are rooting for you - and don't forget to add statutory interest to the claim - see HERE and HERE.

[LX3]

Originally Posted by John Willett

Do your invoices say that you retain all rights until the invoice is paid in full?

I wish they did...

Up until recently, it hasn't been an issue. But last year one of my big clients went into receivership and I went unpaid on a couple of DVDs that got full commercial releases.

I do need to work on my terms and conditions! Have found a good music biz law firm, just need to find time to go and see them.

[camerondye]

Originally Posted by LX3

I do need to work on my terms and conditions! Have found a good music biz law firm, just need to find time to go and see them.

Sounds like this is definitely in order. Good luck on your court case...it sucks to have to deal with the business side of this business.
cam

[John Willett]

Originally Posted by LX3

I wish they did...

Up until recently, it hasn't been an issue. But last year one of my big clients went into receivership and I went unpaid on a couple of DVDs that got full commercial releases.

I do need to work on my terms and conditions! Have found a good music biz law firm, just need to find time to go and see them.

OK, not good.

I put a small note on the end of my invoices, if you want to see what I write send me a PM and I'll copy/past the words into the reply.

But *do* make sure you add statutory interest to what you claim. You are entitled to do this by law.

Sent from my iPhone using Gearslutz

[LX3]

Originally Posted by John Willett

But *do* make sure you add statutory interest to what you claim. You are entitled to do this by law.

Yep, will be doing this. FWIW, here in the UK, if you take things to small claims, you can claim interest on unpaid bills at 8% per year.

[Remoteness]

Paul,

I'm sorry you're going through this sort of thing.

It seems to me that you already lost the battle the moment you went into the "couple of years of to-and-fro and modifying the invoice to address the disputed charges" I'm afraid.

Without knowing what exactly those disputed charges were, it's hard to figure out a solution or way out.

Can you get into it a bit more in detail?
I'd like to help if I can.

[LX3]

It was a very straightforward job on the face of it - the show's musical director negotiated with me to record the next night of the show, after he wasn't happy with the first night's performance. I did him a special deal, since we were already set.

Then it got complicated.

Thanks to the artist's people not returning calls or emails, or passing responsibility to someone else, there ensued two years of sporadic discussions between six different parties. But in short - there were disputes over the mix work that I did for them (which they subsequently denied that they ever asked me to do) and the hard drive I supplied which again, they say they never requested (although the mix engineer they appointed demanded that I urgently send him the multitracks as he had studio time booked... but didn't have a drive he could send me. I eventually managed to retrieve the hard drive, although it did take a year!)

Fortunately, I have an email from the client that states that once the charge for supplying the hard drive is removed, they will pay my bill.

It would be fair to say that today they went back on that one.

I have a good bit of evidence to back my claim so I'm confident that I'll win if it goes to court.

One piece of advice I would say in retrospect is, if you reach any agreements with a client on the phone or in person, immediately send a email to them, confirming that agreement. Even if you don't get a reply, its far preferable to hearsay when it comes to establishing who said what. Although a verbal contract is legally binding, one party only has to deny that the conversation took place for things to become difficult.

Thanks for the offer of help Steve. I'm always interested to hear other people's take on things.

This is far from the worst financial dispute I've had to date, but they are certainly the rudest and most dishonest clients I've ever dealt with. Not that they care. For them I think it's simply how they do business. I won't lose any sleep over it, I just intend to make sure I get paid for services rendered.

[JonesH]

I feel for you! When I just started out, this movie producer went back on our deal and it took several years to resolve. Annoying to say the least, plus I still lost 50% of the sum (from my perspective, that is...).

Originally Posted by LX3

One piece of advice I would say in retrospect is, if you reach any agreements with a client on the phone or in person, immediately send a email to them, confirming that agreement.

I always do this now, and people really love it. It's a good way to establish a professional communication. Great tip.

[LX3]

Originally Posted by JonesH

I always do this now, and people really love it. It's a good way to establish a professional communication. Great tip.

Lesson learned here the hard way. It's just very easy to forget to do the admin when you're busy busy busy...

The other thing to watch for is not to get fooled by smooth-talking, friendly "Yep, that's all fine" type of clients. They might seem easy-going on the phone (and will assure you there's no need for formalities like quotes or contracts), but occasionally it's the smooth-talking approachable types who are preparing to take you to the cleaners. For them, befriending their suppliers then stitching them up is nothing but a cost-cutting strategy. They will turn out to be a lot less easy-going after you send them the bill. That's if you can even get them to answer the phone. Funny how they're always in meetings or away on business once the gig is over...

No offence to the genuinely nice clients (and there are many), but once bitten...

[mixedupsteve]

Good luck. I like your "it will be educational" attitude. Courts should not scare anyone. If you have any evidence you should be fine. Their using your recordings is evidence by itself unless they want to claim you didn't do the recordings at all. Sue for the full amount of the invoice less the HD you got back, not some later reduced amount.
I suspect your courts are very similar to our courts since our government was based on English government.

[Jeff Hayat]

I am going to chime in with my experience here. Not exactly the same, but maybe you can draw something from this.

The person I sued was an ex-employer who failed to pay me for time worked, and materials purchased. I took him (well, technically the company; it's an LLC and you can only go after the company, not the individual who owns it) to small claims court. Just shy of $500. Not alot of money, but it was more the point than the actual money. I put forth the suit, gave the court the $75 fee, and went to court. I won. Do I get paid? Of course not. Next step is go back to the court, and file a writ of execution. I plunk down another $75, and fill out the paperwork. Fortunately, the $150 is recoubable; it gets added on the amount of the claim. I wait three weeks, get the writ in the mail from the court. Send that writ with a letter of explanation to a State Marshall, so that he can serve the LLC's bank. Once served, the bank puts a hold on the dolloar amt indicated on the writ, sends paperwork to the court, and then the court has to sign off on that paperwork. Then the bank releases the money to the Marshall - added on is his fee of $150. Then I get my check. But not so fast. In CT, when you loose a small claims case, you can not file an appeal, but if you are not happy with the decision, you can file a motion to open. Which is basically an appeal of the decision. Bullsh-it. Anyway, the def. claimed that the lein on his acct was his personal acct, and that I do not have the right to that money. Technically that is correct, but I had already spoken to someone at the bank (Chase) who verified that the lein was against the buisness acct. In the meantime, the def decides to change the name of the LLC. So back to court I go. He argues that the lein is against his personal acct, I show the judge that the lein is against the business acct (submitted the proper paperwork), but the def also argued that the LLC that I sued does not exist anymore, and therefore I do nto have a claim. The judge for some reason granted the motion to open. The decision gets sent in the mail, so I was not in court to spank the judge after the decision was rendered. Now, a new trial date is set, so it's back to court again. Now I am getting all these emails from the def, saying I dont have a claim, because the LLC I sued doesn't exist anymore, that it is desolved, etc. Bullshit - it's the same exact LLC with a different name. So what do I do - I file a motion to have the new LLC name added to the docket, so that the suit would be against both LLCs. I wait for the courts decision with bated breath - this could make it or break it for me. Three weeks goes by, and I get a letter in the mail - motion granted. Woohoo! A few weeks later - one week before the court date, the def caved, and sent me the money - inclusive of the xtra $150 I should have gotten anyway. The whole process took about 20 mos., but was well worth it. I have the money, and the satisfaction.

So Paul, I wish you the best of luck here. I know things are a bit different across the pond; here the statute of limitations on a case of this nature is two years. Furthermore, I am not sure what happens after a judgment is rendered in your favor, but if my story tells you anything - it's that you have to be prepared to go the distance and keep at it if you dont get your monay even after going to court.

Cheers.

[NorseHorse]

Originally Posted by Jeff Hayat

The decision gets sent in the mail, so I was not in court to spank the judge after the decision was rendered.

[Indrestudios]

The best piece of gear I've ever purchased is our credit card machine.

Short of a few long time clients, we request a deposit to lock in the date & payment day-of-show before the performance begins. Sure, big labels and production companies will him & haw about PO's and the fact that they never do this type of thing...but in the end if you stick to your guns they'll usually step up and pay the bill. In my experience, it's way easier to fight to get paid before the gig as opposed to weeks, months, or in this case YEARS after. A poor performance or any other number of issues can really change the tone of a project when the curtain closes. I've had to chase labels to get paid for projects where the band had since been dropped, not fun.

-MC

[binarymilton]

How much money are we talking?

Over 2 grand?

[ghellquist]

One first advice - do check that there is any money to fetch.

In my flight club we bought a used airplane. Cutting long story short there were a lot of faults in the documentation which added our costs with the equivalent of 10k USD ( in Swedish money though ). Off to court, not small claims, and we win the case after having shelved up some 10k in legal fees. All well, we though, until the defendant appeals the case to next level of court ( in Swedish law you are generally guaranteed two levels of court ). This would add another 10k at least to our legal fees. Until a wise person ( not me, whish it was ) asks the question whether there are any money to fetch from the company we sued. Nil, on the brink of bankrupcy. Well, we walked away, a bit wiser, not losing as much as was possible.
// Gunnar

[LX3]

@jeff - I'm in awe of your determination and staying power. Great work.

@binary - it's not a lot of money that's in dispute (<£500). I have had bigger bad debts. But after being told point blank that the client isn't going to pay because he "can't be bothered" and "is too busy, and can't afford to waste his time with this" I'm more determined than ever to resolve things in my favour, which would appear to mean going to court. Part of the unpaid invoice includes expenses directly related to the production of the artists live CD (e.g. a rush courier to send additional audio files to the studio, after the mix engineer forgot to take them with him). I'm not here to fund someone else's commercial CD releases out of my own pocket.

If for any reason I don't succeed, I still think the cost of going to court will have been worth it for the experience.

[binarymilton]

Well, good for you. There's a lot to be said for doing things as a point of principle, when someone's being a total c**t.

I must say though, if it's less than 500 quid, I imagine a legal advisor would try to talk you out of it. Why not go to a citizen's advisory bureau first?

By the way, you say "the client". Is it just one person? Is this person part of a larger company? If it's a large company, you might be better off trying to contact people higher up. Sounds like it's not that kind of set-up though.

Make sure you get a move on though! I suspect the longer you leave it, the less significant your case will seem to all concerned.

[antti]

Paul, wish you the best of luck winning the case!

Yes, unfortunately there are plenty of them c**ts out there. That's why they call it 'entertainment business'?

Luckily I received a payment today which took a bit of work or rather 'word-ing'... In fact I've always been paid in the end.. touch the wood.. sometimes it's taken plenty of time, invoices sent, modified, phone calls, 'sharpening the axe' And I've also been entertained by some very amazing excuses as why not been paid in time: fraudalent bank account, label's internet server went down/got hacked, girlfriend was meant to pay it, the bank account details don't work, blah blah blah.

Anyhow.. if someone hires you they should pay you. It's all about a principle and respect.

[Roland]

Hi Paul, I've had a little limited experience with taking clients to court. Over the last 26 years it has amounted to three cases, all of which I won, one of which I got paid on.

First thing to consider, are they liquid, or have they got assets? If the answer is yes, you have a good chance of getting something.

A point to remember, small claims is also known as arbitration in the UK, the reason for this is that the judge does not necessarily just go with the legal points, he makes an arbitration, in other words, if you are going to court over disputed charges and they have paid the majority of your bill, you may not get all you are asking for. If on the other hand they haven't paid at all (even if we are only talking about the second day's work) you probably stand a much better chance. Saying they didn't like the mix, and that is why they are not paying isn't enough, they have a burden of proof to show that it wasn't worth what you were charging for it.

The fact that in a telephone conversation he told you "he couldn't be bothered to pay your bill" will also be admissible as evidence and along with their general behavior possibly help your case.

Do get all your documentary evidence together, times dates, etc. Keep your initial summary of the case to a minimum, these county court Judges are usually ex Lawyers and often in my experience, can't be bothered to trawl through too much detail prior to the hearing.

After making your claim one of four things happens, you get paid plus your court fee, case over, you get an offer of payment, you can accept or reject this, you receive a defense against your claim, it goes to court, you hear nothing, you go to court and judgment is entered in your favour.

I won't go into the details of the case, but, if they defend and it goes to court, it might be good to take a professional witness, their expenses are paid by the court, they will also be instructed that they are a witness for the court, not necessarily for you, and vice versa!

Having got judgment, if they still don't pay, the court bailiff is probably the best way to go, they can seize good, etc to get your money. Don't hire an independent debt collector, I've been stung this way, those working for the court, will do their job.

After all that, if they don't have any assets, or nothing that can be tied to the company you may still have a problem getting money, but the company that you are dealing with will have a CCJ entered against them, not good if they plan on continuing business.

Good luck!


Regards


Roland

[Whitecat]

Some great tools here:

Pay on Time

As has been mentioned, make sure you add interest and admin charges (these are regulated - in your case if it's under £999 it's £40) - use this to calculate the interest - Late Payment Legislation Statutory Interest Calculator - Pay on Time

Remember you don't use a lawyer in small claims court (and neither can they) so it might not be worth hiring a legal firm as you probably can't claim back that expense. Everything is pretty easy to do, just make sure you've got all your evidence, are very organised and basically have your homework done.

[Tomas Miller]

I had a similar issue that nearly went to court. Thankfully after about a year the threats were enough and I only lost out on a few hundred of the total sum.

Although the money is not a large amount I would not let it go either if I were in your shoes.

I wish you the best of luck... Please be sure to up date us on how things end up.

[LX3]

Thanks Roland and WhiteCat. Valuable ideas.

Doesn't seem fair to speculate about how much cash they might have, but we're talking about a well-known artist with a long and reasonably successful track record. I'm sure they're good for it. They maintain an office and staff after all.

I will let you all know how it goes. Don't hold your breath, may take a while.

Rather sad though. I'd always been a bit of a fan of this particular artist. That's over with.

[Dave C]

Paul,

good luck with this.

I've been stung on (way) upwards of four figures on an equipment sale that was brokered, and I never saw a penny of what I was owed. This was close to 30 months ago...

Does anyone know what is the upper limit for small claims court in the UK?

Or have any recommendations for a good lawyer? A good one...

Cheers.

[Adlen]

Originally Posted by LX3

I know this is hardly a newsflash, but recordists beware - there are some real sharks out there, and it's not just small-time acts that will deliberately screw you over.

Originally Posted by John Willett

Do your invoices say that you retain all rights until the invoice is paid in full?

I have my clients sign a contract for a few reasons, one being my royalties. If I did a lot of production on the track, I may ask for a percentage. If it's just mixing, I only take my fee.
My contract states that until the invoice is paid in full, I own 100% of their material and reserve the right to claim 100% of revenue (not profit, every single penny that rolls in) and up to £60 per public broadcast of the material. The broadcast royalties request will be sent to the radio station/venue/DJ before the band. I don't expect the radio station to pay me, but they sure as hell won't play that song out again and since most of the artists I work with are fairly new to the biz, that messes them up big time. They work hard for their airplay, I work hard on their music, if I don't get my money they don't get their airplay. Simple as.

Chances are they'll pay up after the first £60 bill gets sent out.

Good luck!

[Roland]

Originally Posted by Adlen

I have my clients sign a contract for a few reasons, one being my royalties. If I did a lot of production on the track, I may ask for a percentage. If it's just mixing, I only take my fee.
My contract states that until the invoice is paid in full, I own 100% of their material and reserve the right to claim 100% of revenue (not profit, every single penny that rolls in) and up to £60 per public broadcast of the material. The broadcast royalties request will be sent to the radio station/venue/DJ before the band. I don't expect the radio station to pay me, but they sure as hell won't play that song out again and since most of the artists I work with are fairly new to the biz, that messes them up big time. They work hard for their airplay, I work hard on their music, if I don't get my money they don't get their airplay. Simple as.

Chances are they'll pay up after the first £60 bill gets sent out.

Good luck!

This is all well and good, but I know several well known and respected engineers and producers who have been "diddled" out of points by artists, management, record companies. In this business you have to be careful and it does go both ways.

You get hired and not payed by a reasonably established artist, you sue them, it's quite possible they will pay, doesn't look good for it to get around that they had to be taken to court or have a judgment against them. You push for royalty payments from artist, management or record company, you can become a leper. Big time producers probably have it really tightly controlled, but the general view is that you are a "gun for hire". Ultimately it is a clients song and talent the public are buying, and too a large extent IMHO it's slightly pretentious for most producers to be on percentages. There are exceptions, but they don't apply to the majority of cases.

The other case is the free recording/production with a percentage should anything come of it. In my experience if there isn't money upfront for a project, there isn't any value to the project. If something is really worthwhile, people come up with at least some cash. Also with these scenario's there are a million and one way's you can get stiffed even in the unlikely event it does fly. Of course YMMV

[Remoteness]

There is great value in Roland's post.
Thanks for sharing your viewpoint.

[sonare]

Originally Posted by camerondye

it sucks to have to deal with the business side of this business

Over the years I have found that 80% of my time is spent on "business"-- courting new clients, talking to them as friends, taking them out for libation or a meal, smoothing over various things, etc. 20% of the time is spent actually recording, editing, mastering. Once they do a project it's the relationship that KEEPS them.

Rich

[NEWTON IN ORBIT]

Originally Posted by Roland

This is all well and good, but I know several well known and respected engineers and producers who have been "diddled" out of points by artists, management, record companies. In this business you have to be careful and it does go both ways.

You get hired and not payed by a reasonably established artist, you sue them, it's quite possible they will pay, doesn't look good for it to get around that they had to be taken to court or have a judgment against them. You push for royalty payments from artist, management or record company, you can become a leper. Big time producers probably have it really tightly controlled, but the general view is that you are a "gun for hire". Ultimately it is a clients song and talent the public are buying, and too a large extent IMHO it's slightly pretentious for most producers to be on percentages. There are exceptions, but they don't apply to the majority of cases.

The other case is the free recording/production with a percentage should anything come of it. In my experience if there isn't money upfront for a project, there isn't any value to the project. If something is really worthwhile, people come up with at least some cash. Also with these scenario's there are a million and one way's you can get stiffed even in the unlikely event it does fly. Of course YMMV

So Roland, how do you handle this then, do you only engineer and not produce any longer? Just take your fee/rates for engineering?

If you do produce, what do you do to ensure you get paid?

Points/percentage in writing...and still getting screwed?
That sucks.

What do you suggest as a game plan then?

I mean what's the point anymore...

Just curious.
Thanks,
John