Client refuses to pay for the work I have done. What are my rights?

jfoxy92 · 11-08-2018 03:53PM #1

Years ago, person S asked me to design and develop a website for a proof of concept (equivalent of AirBnB). As a contractor I agreed verbally on the fixed fee (10k) for the website with admin cms. I developed the website from scratch, so no Wordpress or other existing frameworks were used. Once ready, I put it online for starting the pilot phase. I have sent S multiple invoices with a complete payment of 10k. All done and dusted.

After the successful pilot, S asked me to convert the pilot website into a fully (minimum viable) working website in order to attracts investors and also to start the online business service. My biggest mistake here was that I started the next design and develop phase without a signed contract or without agreeing the equity or contractor fee. Verbally we agreed that I will get some equity, how much was not agreed at the time. Nothing was signed on both sides, but we worked together on this start-up company fully based on trust (I won't do that ever again).
This continues for 16 months on a part-time basis, which was almost full-time as I was working 2 days on location, all evenings and weekends. A few of my close friends said that I was abused by S as he didn't give me any security of payment or equity. So I started a conversation (way to late) with him to agree on equity split. He offered me 1 figure equity without salary and I turned this down. I wanted at least 2 figures (low) without salary, but he refuses. From that moment the business relationship went down. In the last 6 months he put me on payroll as it was required by a local grant, but again, no contract was signed here. Once again we tried to get an agreement on the equity and all the talks lead to nothing. Eventually, I stopped working on the website and left the company, although I was never employed by the company as I didn't sign any contract with S.

Meanwhile, the business is fully running on my designed and developed website. Also S is using my designed marketing materials. The relationship is really bad and I am trying to get some money back, especially for the work I have done over the 16 months that I wasn't on payroll. I still have the credentials to the hosting, but I don't want to do something illegally stupid e.g. deleting the website.

My knowledge in law and this matter is that I am still the owner of the IP of the website and marketing materials as I have created all of these.
S paid 10k for the pilot website which means he can use the pilot website (but he does not own the code of the website).
As we didn't sign any contract for the working website and marketing materials, I consider that he didn't pay for the work I have done. If he didn't pay for the work, which means I can remove it from the hosting.
As I got paid in the last 6 months (payroll) - but we didn't spec out what he paid for - I consider that he paid for my time at the company which is 2 days a week. I only got paid because the grant requires S to.

I want to seek for a solicitor, but only if I know I have a big chance of getting something back.
I really don't know what to do next, can someone give me advice on what to do?
Lets say, the amount of time I have spent during the 16 months (let alone the 6 months after that) is worth around 50k.

nuac · 11-08-2018 05:27PM

Mod
Long past solicitor time, but will leave open for general discussion subject to forum rule on legal advice

Samuel T. Cogley · 11-08-2018 06:51PM

jfoxy92 wrote: »

Years ago, person S asked me to design and develop a website for a proof of concept (equivalent of AirBnB). As a contractor I agreed verbally on the fixed fee (10k) for the website with admin cms. I developed the website from scratch, so no Wordpress or other existing frameworks were used. Once ready, I put it online for starting the pilot phase. I have sent S multiple invoices with a complete payment of 10k. All done and dusted.

After the successful pilot, S asked me to convert the pilot website into a fully (minimum viable) working website in order to attracts investors and also to start the online business service. My biggest mistake here was that I started the next design and develop phase without a signed contract or without agreeing the equity or contractor fee. Verbally we agreed that I will get some equity, how much was not agreed at the time. Nothing was signed on both sides, but we worked together on this start-up company fully based on trust (I won't do that ever again).
This continues for 16 months on a part-time basis, which was almost full-time as I was working 2 days on location, all evenings and weekends. A few of my close friends said that I was abused by S as he didn't give me any security of payment or equity. So I started a conversation (way to late) with him to agree on equity split. He offered me 1 figure equity without salary and I turned this down. I wanted at least 2 figures (low) without salary, but he refuses. From that moment the business relationship went down. In the last 6 months he put me on payroll as it was required by a local grant, but again, no contract was signed here. Once again we tried to get an agreement on the equity and all the talks lead to nothing. Eventually, I stopped working on the website and left the company, although I was never employed by the company as I didn't sign any contract with S.

Meanwhile, the business is fully running on my designed and developed website. Also S is using my designed marketing materials. The relationship is really bad and I am trying to get some money back, especially for the work I have done over the 16 months that I wasn't on payroll. I still have the credentials to the hosting, but I don't want to do something illegally stupid e.g. deleting the website.

My knowledge in law and this matter is that I am still the owner of the IP of the website and marketing materials as I have created all of these.
S paid 10k for the pilot website which means he can use the pilot website (but he does not own the code of the website).
As we didn't sign any contract for the working website and marketing materials, I consider that he didn't pay for the work I have done. If he didn't pay for the work, which means I can remove it from the hosting.
As I got paid in the last 6 months (payroll) - but we didn't spec out what he paid for - I consider that he paid for my time at the company which is 2 days a week. I only got paid because the grant requires S to.

I want to seek for a solicitor, but only if I know I have a big chance of getting something back.
I really don't know what to do next, can someone give me advice on what to do?
Lets say, the amount of time I have spent during the 16 months (let alone the 6 months after that) is worth around 50k.

They might beg to differ which muddies the waters with your claim to the IP in my uneducated opinion. You default to statutory rights IIRC if you sign no contract but you may be an employee in practice.

Mr. Incognito · 13-08-2018 09:13AM

Solicitor time.

I could break down the answers to all your questions but this is an internet forum. You shouldnt be getting this type of advice here.

Go to a solicitor.

randomrb · 13-08-2018 12:59PM

You probably have a good case but you need to get as much as you can in the way of records, timelogs and evidence to back up all the work you say you did.

Then bring that to a solicitor cause it is too complicated to advise online.

jfoxy92 · 21-08-2018 01:00PM

nuac wrote: »

Mod
Long past solicitor time, but will leave open for general discussion subject to forum rule on legal advice

What does this mean? Am I too late to get a solicitor?

Mr. Incognito wrote: »

Solicitor time.

I could break down the answers to all your questions but this is an internet forum. You shouldnt be getting this type of advice here.

Go to a solicitor.

I just want to know if I can do anything before contacting a solicitor? Can I invoice person S for the 16 months and ask him to complete this invoice within 14 days, otherwise I will take down the website. I think this is a fair way, but I am not sure if this is a bit of blackmailing?

IITYWYBMAD · 21-08-2018 03:05PM

jfoxy92 wrote: »

What does this mean? Am I too late to get a solicitor?

No, you should get one straight away.

jfoxy92 wrote: »

I just want to know if I can do anything before contacting a solicitor? Can I invoice person S for the 16 months and ask him to complete this invoice within 14 days, otherwise I will take down the website. I think this is a fair way, but I am not sure if this is a bit of blackmailing?

I'll put it this way to you. You can enter into a tit for tat fight with this person if you want. You can calculate 16 months * 2 days * 1500 per day, if you want. You can take down his website now, if you want. He could counter sue you, if he wants, and include lost earnings.

Then let's say it does get in front of a judge, he may not look favorably on this course of action.

You have 2 options.

1) Mediate, try and approach him/her renegotiate and come to a settlement.
2) Go the legal route and take your chances.

You should never enter into a commercial agreement, without paperwork, it's a lesson learned.

NUTLEY BOY · 22-08-2018 10:23AM

Long shot OP but you might look at your professional indemnity insurance policy. Some professional indemnity insurance contracts include an element of cover for legal costs in pursuing unrecovered fees.

Interestingly enough a frequent first response to a professional seeking payment of fees from a recalcitrant client is a spurious allegation of professional negligence. The game plan is to hope that this will deter the professional from pursuing the debt.

Before you retain a solicitor get a S. 68 letter from the solicitor setting out what work may be involved. Be sure to get an estimate of likely costs. Shop around before you engage.

nhlau87 · 05-09-2018 01:47PM

I have a similar poblem, can someone advise a proper solicitor?

Mod
Sorry, we don't recommend solicitors on this forum

beaufoy · 05-09-2018 02:04PM

If anyone can find a good solicitor let me know I have been looking for years. The IP should offer mediation to the third party. If said party rejects mediation then the IP will have the stronger case. Mediation is quite often done by solicitors, so there might be a lack of competence/objectivity. Also if the other party is a mason it might influence the mediator or judge should the matter go to court

Mod

afaik most solicitors act competently and objectively.

There are few practising masons about these days.

Client refuses to pay for the work I have done. What are my rights?

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