Wednesday, 08 January 2014 14:49

Going Dutch: Contractor Debt Recovery in the Netherlands

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    Working for overseas clients is either a gamble, or a logical expansion, depending on which way you look at it - but as a self-employed contractor, you need to be confident that you will be paid promptly, as international debts can be more difficult to pursue.

    A recent client handled by Safe Collections demonstrates this well; Alex Tucker had every reason to expect prompt settlement of his invoices by his Dutch client. He had worked with the company, both as a self-employed individual and as temporary staff, since 2005, as well as supplying services via a third-party limited company.

    He was asked to provide further work, and naturally agreed, on the understanding that he would do so through their at-the-time sole provider of contractor services.

    Although the period of work lasted only from December 2010 to March 2011, a significant change happened during that period, as the contractor services provider agreement ended in February 2011, leaving a question mark over how Mr Tucker was to receive payment for his final month of work.

    Things were complicated further by the fact that the original contract had never been agreed to in full - in particular, because it contained a non-compete clause that would have meant Mr Tucker had to cease work when the agreement ended in February, rather than being able to continue to provide the service directly to the client.

    Despite not signing the agreement, Mr Tucker received an invoice from the service provider company for a €25,000 penalty fee - for breaking the non-compete clause he had never agreed to. Unsurprisingly, the company also withheld payment on his final invoice, despite having taken payment from the client based on his submitted time sheets.

    Stalemate

    With both parties now perceiving themselves as having been wronged - Mr Tucker because he had not received full payment, and the Dutch contractor services provider because they felt the non-compete clause had been broken - a stalemate had been reached.

    Mr Tucker engaged an Amsterdam-based legal firm to pursue for payment, and in late July contacted the debtor to warn them that statutory interest would be charged if full payment did not arrive promptly; however, by September, no real progress had been made, and after October communication broke down completely.bikes

    In February 2012, having heard nothing for several months, Mr Tucker contacted Safe Collections for assistance in pursuing the debt, valued at several thousands of euros.

    We were able to refer the case to our Dutch affiliate, helping to overcome the difficulty caused by the creditor and debtor being located in different countries.

    Mr Tucker's MP, Steve McCabe, had already tried several methods of reigniting progress - including speaking with the Foreign & Commonwealth Office, and the Dutch Embassy in London - but to no avail.

    Checkmate

    Safe Collections' Dutch affiliate restored communication with the debtor, who had already been advised by Mr Tucker's lawyer that the non-compete clause was a separate issue, and did not allow them to withhold payment; however, they again raised it as a concern.

    Our affiliate simply demanded proof that the non-compete clause had been entered into - which, because Mr Tucker had never signed the initial contract, they were unable to provide.

    Ultimately, without any evidence to support their objection, the debtor finally recognised that they had no legal cause to withhold payment, and we were delighted that Mr Tucker eventually received satisfactory settlement of the account.

    We work with affiliates in countries all over the world to help ease the process, as well as to benefit from their local knowledge of the relevant rules and legislation on overdue payments - and we are pleased to have been able to bring Mr Tucker's dispute to a close after several years of him pursuing the debtor through various channels.

    In part two of this series we speak to a very happy Alex Tucker about how the situation unfolded and his views on the recovery.

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    Image "My first foto in Netherlands" by Flickr user Petr80 is licensed under CC BY 2.0