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 furniture) meeting UK fire safety standards, and with which the claimant gave assistance. The defendants did not renew the agreement, but continued to trade successfully with parties introduced. The claimant sought compensation, and the defendant resisted the application of the Regulations.
Held: The claimant’s role had been envisaged to be one of introducing customers, not of managing the difficulties with the Fire Regulations. Regulation 8(a) is conjunctive and cumulative: the transaction is to be due to the agent’s efforts during the agency and the transaction is within a reasonable period after the agency contract terminated. The regulations are intended to be flexible. In this case, nine months was a reasonable period. The entitlement under regulation 17 continues where a contract expired by effluxion. The court set out fourteen factors to be allowed for in calculating an award: ‘the ‘damage’ suffered by a commercial agent as a result of the termination of the agency (Regulation 17 (6)) is – generally speaking (and breach of contract cases aside) – to be regarded as a putative loss and not simply (by common law standards) actual loss. This is shown by the exclusion of principles of mitigation and applicability of the compensation provisions to termination on death or retirement. Clearly one important element, as the recitals to the Directive show, is to avoid a principal being unjustly enriched by retaining for itself without payment the entirety of the benefit of goodwill to which the activities of the agent during the agency have contributed. But another element (which finds both reflection and emphasis in Regulation 17(7) (a)) is to compensate the agent for the loss of a beneficial agency contract. One can perhaps there see some analogy with redundancy payments in an employment context: although the analogy cannot be pushed too far, since the policy considerations behind redundancy payments for employees are rather different.’
Judges:
Mr Justice Davis
Citations:
[2003] ECC 23, [2003] EWHC 23 (QB), [2003] EuLR 189
Links:
Statutes:
Commercial Agents (Council Directive) Regulations 1993 (SI 1993 No 3173) 8 17
Jurisdiction:
England and Wales
Citing:
Cited – Page 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 . .
Cited – Whitehead v Jenks and Cattell Engineering Ltd 1999
. .
Cited – David Frape v Emreco International Limited (2) SCS 2-Aug-2001
. .
Cited – King 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 . .
Cited – Moore v Piretta Pta Ltd QBD 11-May-1998
M had a series of agency contracts selling women’s clothing. The last contract was in 1994, and on termination, M claimed an indemnity under the contract which itself applied the regulations. Reg 17(3) gave an indemnity for new customers, where the . .
Cited by:
Cited – Lonsdale 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 . .
Adopted – Light and Others v Ty Europe Ltd CA 25-Jul-2003
The claimants sought damages under the regulations. They were self employed sales agents. At first they were sub agents but upon the ceasing to trade of the main agents they had acted directly for the principal. Those agencies had been terminated. . .
Cited – 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’ . .
Lists of cited by and citing cases may be incomplete.
Agency, Commercial, Damages, European
Updated: 04 November 2022; Ref: scu.178907