How to Handle A Dispute With Your Client (without getting into legal hot water)
What do you do if you get into a dispute with a client? This is a tricky one, often it relates to nonpayment, I have two pieces of advice in relation to that. There’s two methods of dealing with it, one is always taking money upfront. If you always get money upfront, then there can’t be a payment dispute, very simple.
In my own firm, I used to let people pay things off, and got stung when someone didn’t pay me the $8,000 that they owed. I think 6,000 of that, was a government fee that I had paid out on behalf of my friend who I trusted. Then the company went bankrupt, and then she ended up not paying me at all. After I got stung like that, I decided everybody pays upfront. If you can’t afford it, you can pay it off, and when you finish paying off the last part, I’ll provide the services, and since then I haven’t had any problems. Except for one person, who I didn’t do that with.
She said she was gonna pay in two lots, she paid the first lot and then the second lot she just didn’t pay. I’d done the work and provided the services and I discovered a very good debt collector in Springfield, called 3D Debt Collections. I’ve referred a lot of my clients to them, and what they do is they communicate with the debtor, and they try to work out a payment plan and actually get you your money back. They are very good, and my second debt tip is to get a good debt collector who gets clients to pay it off slowly but surely.
So my two tips are take money upfront, or get yourself a really good debt collector. The debt collector, you might need to do a bit of shopping around for, and make sure you find one that’s got a good success rate and who doesn’t charge too much money. Because when they collect money, obviously they’re doing you a service and you have to pay towards that.
The third and final tip is to tighten up your terms and conditions, the basis on which you do work for your clients, the basis on which you may give a refund, and whether you’ve got a non-refundable deposit. If you’ve got good secure, solid terms, you’re much less likely to lose out on money that your clients owe you. I have a client who had their client sue them for a return of a deposit, and took them to the small claims court QCAT. But the contract that I had drafted for my client, was held to be rock solid. The deposit was a non-refundable deposit of $2,000, and so the court said no, the contract was clear, the non-refundable deposit means just that, non-refundable, and my client didn’t have to refund it.
So having rock solid terms and conditions can give you certainty and security in knowing that you don’t have to pay back a non-refundable deposit or you can collect on outstanding money. So good luck with it, personally, I have found just getting the money upfront saves a lot of headache, a lot of stress, and has been one of the best things I’ve done in my own business. My name’s Cathryn Warburton and I am the Legal Lioness.
