Understanding 'middlemanning' and ensure you get paid

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Updated: 9th September 2021

How to get a Middleman to Pay Your Invoices once you have Completed the Work

When a client is refusing or is unable to pay your invoices on time this can be a frustrating experience, especially when you know that the client has already been paid by their client for work you spent the time and effort doing. Fortunately, if you're in such a position there are action points that you can take to get what is owed to you.

First of all it should be noted that there is nothing unethical or illegal about “middlemanning” products or services, even if it has not been announced or clarified with all parties. The only way that the act of middlemanning itself could be considered a form of misconduct is if the person brokering your products/services has falsely claimed (within a written contract or agreement) to be the sole creator/producer or your deliverables, in which case there would be a legal issue between the middleman and their client.

With that said, regardless of whether you're dealing with a client directly or invoicing someone who is brokering your services, if they fail to pay invoices in accordance with your payment agreements then here are some actions you should consider taking:

1. Issue a Final Payment Request Letter

First, try sending an informal letter requesting the amount due by a specific date (sometimes called a “letter before action”). Be sure to tell them what action will be taken in the event the debt goes unpaid by the specified date (i.e. - “If the amount due is not paid by December 1st then I will have no choice but to take matters to Court”). Usually if the company has the funds available to make payment this letter will prompt them to do so.

2. Serve a Statutory Payment Demand

If the middleman does not pay you by the date specified in your payment request letter (and you're owed £750 or more) then you could apply for a statutory payment demand letter from the Court. This payment demand will carry more weight than an informal letter because it is backed by the Court, and if it goes unpaid you would then have the right to issue a winding up petition against the middleman.

3. Issue a Winding Up Petition Against the Debtor

If you've taken the above steps and the middleman has failed to meet your request for payment then the final step would be to issue a winding up petition against them. Keep in mind that this will likely end up costing several thousand pounds, so if the debt is less than that it may not be worth it to take the issue to Court, and you would likely have better results passing the debt on to a collection agency.

4.      Consult with an Insolvency Practitioner

Finally, before (or after) taking the above steps it is always good to consult with an insolvency practitioner about your situation. Here at Real Business rescue we have helped countless company directors through all types of insolvency and debt-related issues. For free advice send us a message or call us on 0800 644 6080. With 100 offices stretching from Inverness down to Exeter, Real Business Rescue can offer unparalleled director advice across the UK.

Keith Tully


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