Are you a recruiter who has assisted a client who is now refusing to pay? Partner at Sherrards Solicitors, Barney Laurence explains how recruiters can still be owed a reasonable sum of money for services supplied, despite not having fees or terms of business agreed prior to the work being undertaken.
Charging a fee when you’ve not agreed terms
It remains best practice that you should always incorporate your terms and conditions of business into your dealings with clients, even though it is no longer a mandatory requirement to do so since Regulation 17 of the Conduct Regulations was revoked with effect from 8th May 2016.
But sometimes it doesn’t happen. Sometimes clients ask you to help them to find a candidate and you provide that assistance, but it all happens quickly, often via exchanges of emails, and there’s never a conversation about fees and terms of business. Is all lost if the client then engages the candidate you introduced? No, it isn’t.
The answer lies in what is known as “quantum meruit”. That is a fancy latin phrase bandied around by lawyers. It means “the amount he deserves” or “as much as he has earned”. Jargon aside, it allows for you to be paid a reasonable sum of money for services rendered to your client in circumstances where you have not specifically agreed a fee. It assists you in the very circumstances described above.
We see this more and more in recruitment cases, perhaps because of the prevalence of email and the tendency for business dealings to lack formality at times.
The typical “defence” raised by the client in response to a fee claim is “we never agreed terms”, but that doesn’t get them particularly far. If you can show that the client expressly or impliedly requested or freely accepted your services, you have the makings of a quantum meruit argument and can pursue your fee irrespective of the absence of agreed terms. Otherwise the client reaps the benefit of your services without having to pay a penny piece for it and that is unjust.
How much are you entitled to? Well, the law of quantum meruit entitles you to a reasonable sum. More often than not, that is equal to the market rate that applies for the services in question: so, typically the rate you would ordinarily have agreed had you had the discussion at the outset of your dealings with the client.
Always try and expressly agree the basis on which you are dealing with your clients, because that brings a significant measure of certainty. But if you do not, cannot or simply omit to, all is not lost and you still have a basis for pursuing your fee.