Recovering unpaid invoices for a marketing agency on a conditional fee
A marketing agency whose clients were withholding payment, and overdue invoices recovered within two weeks on a no-recovery, no-fee basis
By Malcolm ZoppiMarketing and media
Key facts
- Deal type
- Other
- Acting for
- Creditor (the agency)
- Business
- Marketing agency
- Sector
- Marketing and media
- Deal value
- Under £100k
- Structure
- Recovery of overdue invoices under a conditional fee arrangement
- Timescale
- Debt recovered within two weeks
- Completed
- Recovered
- Lead solicitor
- Malcolm Zoppi
At a glance
A marketing agency had clients refusing to pay invoices until they saw results, which was putting pressure on its cash flow. The agency did not want to spend more money chasing the debts. We acted on a conditional fee basis, paid only if the debt was recovered, and recovered it within two weeks.
The client and the objective
The agency had delivered the work it was engaged for. It wanted to be paid without throwing good money after bad.
The work
- A review of the agency's terms and the invoices.
- A formal demand to the debtor.
- A fee payable only on recovery.
Key legal issues and how we dealt with them
Paid for work, not results
Unless the contract makes payment conditional on results, a client must pay for work properly done. Setting that out clearly to the debtor removed the basis for withholding payment.
Keeping the cost risk off the client
A conditional fee meant the agency did not risk further cash on the recovery. The fee only became payable if the money came in.
Outcome
The debt was recovered within two weeks, easing the agency's cash flow.
What this deal shows
- Clear payment terms in the client contract are the best debt recovery tool.
- A formal, well-reasoned demand often gets results without court.
- Fee arrangements can be structured so recovery does not add to cash flow pressure.
“The agency had done the work. It deserved to be paid, and it should not have had to spend more money to get there.”