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Franchisee claims unpaid commission in court clash

A former Ashley Law adviser who claims he is still owed money in unpaid commission by the company finally took his battle to court last week.

Chris Wilson alleges the company was in breach of contract and is seeking to recoup preand post-termination commission he believes he is entitled to.

Mr Wilson bought the franchise for Ashley Law Woking in Surrey in 1996. He resigned in July 2002 and has since fought a lengthy legal claim to recover monies he says are still outstanding.

The independent financial adviser says that his agreement with Ashley Law stated that he had guaranteed client ownership and is therefore entitled to renewal commission for clients.

But Ashley Law claims that all accounts have been settled and it does not owe Mr Wilson anything.

The dispute was played out last week during a three-day hearing at Guildford County Court.

Mr Wilson is one of a group of disgruntled ex-agents involved in legal action against Ashley Law.

The court heard that the firm received commission secured by Mr Wilson and should have taken 12.5 per cent, paying the remainder to him.

But he said that commission payments were “all over the place” and “inaccurate'”and said there was no way a firm like Ashley Law should have accounting procedures like that.

He said that they were 18 months behind in payments and admitted in May 2001 he wrote to clients asking them to pay commission direct to him “out of pure frustration”.

When asked by Grant Armstrong, representing Ashley Law, whether he accepted it breached his agreement with them, Mr Wilson replied: “I personally did not see it as a breach because I was forced into it.

“I was forever chasing Ashley Law for commission statements. I was trying to put pressure on them to make sure they paid me on time.”

He said he informed Mr Jock Cassidy, of Ashley Law about the move, who he said told him it was a “prudent idea”.

The court heard that Mr. Wilson set up his own company called Mortgage Bureau, which Mr Armstrong said was to transfer business away from Ashley Law and “neatly sidestep the 12.5 per cent commission”.

But Mr Wilson said he made Ashley Law aware of what he was doing and said he set up the company so he could have some control. He said: “I could not survive. With the inaccuracies , it was just awful.”

He set up a further company called Surrey Personal Finance and went on ISL training courses before handing in his notice to Ashley Law in July 2002.

He said when he purchased the franchise, it was with guaranteed client ownership and he would still be entitled to renewal commission.

Ashley Law has in turn submitted a counter-claim saying Mr Wilson owes it 25,000 in management fees relating to an office in Hampton Hill which he denies was ever in operation.

Mr Wilson said he agreed a price of 1500 for the Hampton Hill franchise in July 1998 but it was later increased to 4,000 by managing director Jock Cassidy.

He said: “I wanted it to be an effective office but was not prepared to pay the price so we did not proceed.”

He claimed there was only ever one piece of business that went through Ashley Law Hampton Hill and said any other business was introduced back to Woking.

Jock Cassidy, giving evidence, admitted that almost a quarter of his agents were left feeling they were not being paid properly.

He said: “It was an ongoing problem. We had between 15 to 25 franchisees complaining every month.”

He told the court they employed four staff in the accounting department and three in the business inputting system at the company’s HQ in Hounslow.

He explained that a number of circumstances caused a “backlog” of commission payments including the deaths of two staff. In 2001, he said Ashley Law moved its data-entry process from in house to outsourced with an accountancy firm.

Mr Armstrong, in his closing speech to the court, highlighted the “serious breach” of agreement between the two parties by Mr Wilson setting up other companies and effectively taking business away from Ashley Law.

He said: “We have the impossibility of Ashley Law ever agreeing to an IFA which cuts them out of commission.

“Why would Ashley Law have any benefit from that alternative arrangement? It placed Mr Wilson in competition with Ashley Law – an extraordinary position to be in and to which he would have no satisfactory answer.”

Edmund Walters, who represented Mr Wilson, said in his closing speech that there were clear difficulties with the accounting system which affected a large number of people in Mr Wilson’s position.

He said: “This company failed to adopt a proper system of identifying, allocating and paying out franchisees.”

He said that in his submission it would be an “absurd situation” if Ashley Law were denying Mr Wilson owed commission because of a perceived breach of contract by setting up the other companies.

Judge Robert Reid, QC, who presided over the case, reserved judgment until a date to be decided.

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