Edis Felić: Some large companies invent problems to avoid paying small ones

A few days ago, I spoke with a construction entrepreneur who performs specialized work on construction projects. This is a small company that is engaged as a subcontractor by main builders and which, according to the entrepreneur, often has problems with payment from them. He claims that they invent reasons for non-payment. He provided me with two recent examples of contract violations; the first involves a Slovenian company, and the second a large Croatian builder, noting that this is not the first time it has happened. He also claims that some other small construction companies experience similar issues. By agreement with him, we will not mention either his name or the names of these companies, but perhaps they will recognize themselves in all of this. It is important to warn other small construction companies that some large ones (not all) exploit their urgent need for money and blackmail them into agreeing to a settlement that will pay them 10 to 15 percent less than the contracted price. They already have a developed technique for blackmailing small companies.

Invented Problem

– They invent that our workers are responsible for some damages, for example, that they destroyed a working tool or caused damage to a wall. They usually say this when all the work is completed and the handover of the building is carried out, that is, when it is time to pay for the work we have done – says the entrepreneur. Most often, it concerns work that is paid in stages, as each part is completed. Large companies pay small ones, but the last stage remains unpaid. Our builder says that the main contractor inventing problems is evident from the fact that there is never a record of the damaged item or part of the building, and they do not even mention it on the day the alleged damages occur. My interlocutor says that if someone from another company damaged his machine, he would immediately contact the director of that company and try to resolve it; if he failed, he would quickly draft a record of it. In the case with the Slovenian company, he had to agree to a settlement because it was about collecting three hundred thousand euros, of which he had to leave fifty thousand euros to the Slovenians. This is a large amount of money, and although he says he was convinced he would win in court, he could not wait several years because such money was urgently needed for his small company, so he agreed to the settlement. By abusing the position of a small Croatian company that needs money, the Slovenian company, therefore, claims my interlocutor, earned fifty thousand euros.

We Have Made Progress in Collection

A similar situation occurred with a well-known Croatian construction company, but fortunately, the amount was much smaller, sixty thousand kuna. Again, in the large company, says the interlocutor, they invented a problem without any evidence. Since it was a smaller amount, my interlocutor decided to seek justice in court, and recently it was ruled in his favor, to which the large company appealed. He expects that in a few years he will win the court case and collect with interest, but he himself admits that if it had been a large amount, he would have ‘agreed to their lies’. If we were to be ironic, we would say that we have made a step forward – now at least we are seeking justification for non-payment, before we even ignored creditors.