Lonsdale (T/A Lonsdale Agencies) v Howard and Hallam Ltd: HL 4 Jul 2007

The claimant sought compensation after his commercial agency was terminated. The court had found that the agency was declining in turnover, and reduced the compensation accordingly. There had been no written agreement for the agency, and six months’ notice was given.
Held: The agent’s appeal failed. The UK had chosen to implement both the allowed systems for calculating compensation, providing an indemnity if agreed by the parties, but otherwise as calculated under regulation 17. The system was derived from French law, and the court was entitled to look to that law for assistance. That did not mean that the British Court should follow French practice, based on commercial practice in France, and award two years’ commission; the article was not an endorsement of French practice, but left the calculation within the discretion of member states. This was not a business fro which anyone would pay the sum sought. Reference to the ECJ was refused.
Lord Hoffmann said: ‘the courts of the United Kingdom would not be acting inconsistently with the directive if they were to calculate the compensation payable under article 17(3) by reference to the value of the agency on the assumption that it continued: the amount which the agent could reasonably expect to receive for the right to stand in his shoes, continue to perform the duties of the agency and receive the commission which he would have received.’
Lord Bingham of Cornhill, Lord Hoffmann, Lord Rodger of Earlsferry, Lord Carswell, Lord Neuberger of Abbotsbury
[2007] UKHL 32, Times 10-Jul-2008
Commercial Agents (Council Directive) Regulations 1993, Council Directive 86/653/EEC of 18 December 1986 on the coordination of the laws of the Member States relating to self-employed commercial agents 17
England and Wales
Appeal fromLonsdale v Howard and Hallam Ltd CA 8-Feb-2006
The claimant sought damages after his agency with the defendants was terminated. The central issue was whether compensation was to be calculated at two years commission as derived from French practice or otherwise.
Held: ‘there is no clear . .
CitedInland Revenue Commissioners v Crossman HL 1937
For a valuation for estate taxes, the value is what a purchaser in the open market would have paid to enjoy whatever rights attached to the property at the relevant date.
Lord Russell of Killowen said that a share is the interest of a . .
CitedIngmar Gb Ltd v Eaton Leonard Technologies Inc ECJ 16-Nov-2000
When a commercial agency was terminated in circumstances which under community law would entitle the agent to compensation, that compensation was payable even though the contract expressed itself to be governed by the law of California, and the . .
CitedHonyvem Informazioni Commerciali (Freedom Of Establishment) ECJ 23-Mar-2006
Europa Independent commercial agents – Directive 86/653/EEC – Entitlement of a commercial agent to an indemnity after termination of the contract. . .
CitedPage v Combined Shipping and Trading Co Ltd CA 24-May-1996
Mr Page was taken on to trade in commodities for the defendant for a minimum period of four years. Six months later the defendant’s parent company decided to cease trading activities, and he began proceedings claiming compensation under regulation . .
DisapprovedKing v T Tunnock Limited IHCS 2000
The pursuer had been employed as a commercial agent by the defendant which carried on business as a baker. The pursuer sold only the defendant’s cakes and biscuits. The defendant decided to close its bakery business. The claimant sought compensation . .
CitedBarret Mckenzie and Co Ltd v Escada (UK) Ltd QBD 1-Feb-2001
The court considered the method of calculation of compensation payable to a commercial agent on termination of the agency. The directive provided that the agent should be compensated, not indemnified, and the way an English court calculated . .
CitedTigana Ltd v Decoro Ltd QBD 3-Feb-2003
The claimant sought compensation after its sales agency agreement with the defendant was terminated. He had opened up several substantial sales channels for the respondent’s products within the UK. There were difficulties in the products (leather . .
FlawedSmith, Bailey Palmer v Howard and Hallam Ltd QBD 14-Nov-2005
Claim for compensation after termination of commercial agency agreement. . .

These lists may be incomplete.
Updated: 19 April 2021; Ref: scu.254550