How can we get a US-based client to pay our invoices without court action?

Question

A long-term client’s company was bought by a larger company and our ongoing services contract was handed over to the new company.

We are now owed a large sum of money by the new owner and we have had to get our lawyers involved; potential court action letters have been sent to the client company.

We would like to avoid actually taking court action – do you have any suggestions ?

Answer

Hello,

Well, your lawyers would probably advise about alternative dispute resolution systems so maybe the issue relies around the US company hiding behind their jurisdiction.

As it is, an international mediation- even an online mediation- may be a way to end the dispute, limit it or at least to get a better idea of the things not currently working out.

Basically the mediator acts as a third neutral, impartial who listens to the parties about their interpretation of the controversy and through a handful of techniques tries to have them reach a total or partial agreement, on the parties terms.

For the mediation to have a chance of success both parties need to at least show a will to enter discussion in good faith. It´s better to recur to it when there´s a legitimate controversy and not just bad payer excuses and the like.

Another option would be for the parties to recur to arbitration but it´s a difficult path to go through when the dispute already arose. Parties would like to select the arbitration court they think better suits them and that is such a roadblock. In this case, the arbitrator doesn´t lead the parties to an agreement, just produces an enforceable award, similar to a judge´s resolution.

Best regards,

Jose Garriga

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