Prevent collections disputes: record assignments and specify hours!

Prevent collections disputes: record assignments and specify hours!

Lawyers are hired regularly to conduct collections proceedings for their clients. But sometimes, they themselves are the topic of a collections dispute – e.g., because the client hasn’t paid their own invoice. The non-paying client’s defence is often the same: no assignment was given for the work activities and/or too many hours were charged. How does the court assess these claims? Dutch debt-collection law specialist Hidde Reitsma explains on the basis of a recent judgement.

 

Attorney performs assignment for defendant

The plaintiff in this case performed work activities at the assignment of the defendant and at the defendant’s expense. For example, on behalf of the defendant, he submitted a viewpoint against a change to a zoning plan. He also communicated and negotiated with various parties. Plaintiff sent invoices for this, but these remained partially unpaid.

Collections proceedings: compliance with the agreement

In collections proceedings, the plaintiff demands compliance with the agreement concluded between parties. In this case, this is complete payment of the unpaid invoices, plus interest and collection costs. Since the claim is below the limit of €25,000, the District Court is authorised to hear the dispute.

Does a fixed price agreement exist or is this on the basis of an hourly rate?

The defendant first claims that parties have concluded a fixed-price agreement. According to this price agreement, the plaintiff would perform his work activities for a fixed sum of €,1500. The District Court judge rejects this defence. He refers to the order confirmation that the plaintiff mailed to the defendant. This does indeed state that the submission of the viewpoint would be performed for a (fixed) amount of €1,500, but it also includes that additional work activities would be performed for an hourly rate of €245. While the defendant may indeed not have confirmed these agreements, he also did not make protest against them.

Has the defendant issued an assignment for work?

It is certain that the plaintiff actually performed multiple work activities (more than simply submitting the point of view). These activities were charged at an hourly rate in accordance with the order confirmation and are not part of the fixed price agreement, as the defendant claims. The district court judge considers it unlikely that the defendant would not have issued an assignment for these additional activities. Plaintiff kept the defendant informed the entire time of his work activities and the defendant never objected to this.

Defendant considers the attorney’s invoice amount excessive

Finally, the defendant objects to the amount of the invoice. Purportedly, too much was charged. However, the District Court judge is of the opinion that the plaintiff substantiated the claim to a sufficient degree. A proper specification of hours was included with the invoice. It is then up to the defendant to offer a justified and substantiated defence against this specification of hours. He did not do this.

AMS Advocaten for collections disputes

The plaintiff’s claim was honoured in its entirety by the district court judge. So the plaintiff had a well-documented claim, indeed: the assignment and the appropriate hourly rate were confirmed by the plaintiff in writing and he had maintained the activities performed in a timesheet. These two conditions are crucial for the success of a collections dispute. Therefore, one should always indicate the price agreements and scale of the activities on paper or in an e-mail before starting work. And if you work on the basis of an hourly rate, then record the hours properly.

Specialists in debt collection in The Netherlands

The Dutch lawyers with AMS are considered specialists in debt collection. They offer a sharp and transparent fee structure, and aim to provide high-end professional services. Should you have further questions on debt collection, please contact AMS.

Hidde Reitsma - Advocatenkantoor AMS Advocaten
Hidde Reitsma Hidde has a varied consultancy and litigation practice, focusing on corporate law and insolvency law. He frequently acts in proceedings before the Enterprise Chamber of the Court of Appeal in Amsterdam and in cases on directors’ liability. Hidde also advises on drawing up and negotiating contracts, mergers and acquisitions and joint ventures. Follow Hidde also on Google or LinkedIn. Hidde is available via e-mail and +31 (0)20-3080315.
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