Authors: has your publisher cancelled your contract?

In my previous post, I talked about how some publishers are reacting to the economic situation by cancelling authors’ contracts in order to reduce costs. I discussed the legal principles that are applied by the English courts in assessing the damages that an author is entitled to in such a situation.

Of course, publishers will do everything they can to minimise the amount they pay to an author in this situation — after all, it’s a cost-cutting exercise.

Advances are normally paid to an author in three equal instalments (one-third on signature of contract, one-third on delivery and acceptance of the manuscript and one-third on publication). Sometimes the advance might be payable in only two instalments — one-half on signature of contract and the other half on publication — for example, if the work was more or less complete and accepted when the contract was signed.

In general, when cancelling an author’s contract, the publisher will say to the author that he or she can keep any advance that has already been paid (usually only the amount paid on signature of the contract, but possibly also the amount paid on delivery and acceptance of the manuscript, depending on when the contract is cancelled), but would not ordinarily offer as well the amount payable on publication. What the publisher and the author may not realise is that the author’s strict legal entitlement might well greatly exceed the full amount of the advance.

The publisher will endeavour to get the author to sign away his or her right to make any claim for anything over and above the advance, in return for getting back the rights to the book. Any authors out there reading this, who have had their contracts terminated by their publisher, should take legal advice before signing any release put forward by their publisher. Likewise, any agent whose author is in this situation should also consider carefully — and take advice, if unsure — what their author’s real entitlement is.

No one likes going to court to enforce their legal rights. In practice, if an author claims to be entitled to more than the publisher has offered on termination of the author’s contract, and is prepared to instruct a lawyer to advance the claim against the publisher, then it’s quite likely that a negotiated settlement will follow, where the publisher pays more than it originally offered and the author settles for less than his or her strict legal entitlement. In that way, both parties avoid the stress, publicity and potentially huge cost of a court case. There are some examples where this type of case has reached the courts — see my previous post. Indeed, the Andrew Malcolm case went all the way to the Court of Appeal, where Malcolm won. But it was a hard-fought battle, and the Court of Appeal hearing wasn’t the end of it, as there then had to be an assessment of the damages to which he was entitled — and that was itself was hard-fought court hearing, with a great deal of prior preparation, too.

There are more civilised ways for an author and publisher to settle a dispute!

If both author and publisher acknowledge that the author is entitled to more than just the contractual advance, but cannot agree on an amount, even after negotiation directly or between lawyers, or between the author’s agent and the publisher, then one alternative way of resolving the matter without going to court is mediation — sometimes known as Alternative Dispute Resolution. This involves appointing an independent individual to assist the parties in finding a way in which the dispute can be resolved to both parties’ satisfaction. It might involve both parties coming together at a neutral venue, camped in separate rooms, with the mediator shuttling between them until an agreement is reached. Once an agreement has been arrived at, it is then recorded in a legally binding document. It seems to me that this process is well-suited to this type of dispute between author and publisher, although in my view it would probably be better if the parties’ respective lawyers could thrash out a deal first, with at least some reference to legal principles.



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