Overview 

A client in the leisure industry sector was facing a claim for £hundreds of thousands from a former consultant for unpaid commission. 

Context and Challenge

Our client agreed that the consultant was owed commission, but the amount of commission was in dispute. In addition, the consultant:

  • had not handed over the company’s laptop containing all kinds of important information like customer contacts;
  • had not done a proper handover of the customer holidays that he was looking after therefore exposing our client to reputational risk;
  • had not updated our client’s CRM system and so our client was unaware of some potentially very lucrative enquiries;
  • was in the process of joining our client’s competitor;

To add to the challenge, the consultant, who had previously been an employee of our client, had not signed their new consultancy contract so it was unclear exactly what the status of the “consultant” was and the terms under which he was engaged by our client.

Process and Insight 

We reviewed the documentation and correspondence between the parties and created a chronology of events. 

We spent time speaking with the client’s team to understand exactly what had gone on and what the issues were. 

We prompted our client’s CFO to provide us with certain financial information about the deals that the consultant had been working on which resulted in us discovering that the consultant had falsified information to boost their commission entitlement.

We engaged in correspondence with the consultant’s lawyers.

Solution 

Given the size of the claim, and the many aspects to it we recommended the involvement of a barrister who we know very well. He gave our client very clear advice on what the consultant’s status was and a strong prospect of successfully defending the consultant’s claim above the amount that we considered the client owned.

Discovering that the consultant had falsified records from the preparatory work we had done was very useful, not only in respect of establishing a lower claim value but also in putting the consultant and his legal team on the back foot. 

Results 

Our client was able to achieve a very favourable settlement with the consultant. This was well below the amount claimed by the consultant even taking into account the reduction to be applied as a result of the falsified financial information.

While our client achieved a great result they also learned a lot from the experience and implemented better processes and controls into their operations. We helped our client with new employment contracts and consultancy agreements which included much more extensive provisions. For example, we drafted a very detailed commission schedule to be included in the back of the new consultancy contracts. Within the schedule we drafted far more extensive triggers for commission entitlement taking them beyond simply the landing of a new customer and that customer holiday going ahead.