Having this week settled probably my 50th commercial agency law case on the eve of a trial, and having spent four hours yesterday trying to advise on levels of compensation in another matter, I sympathise with Stephen Sidkin of Fox Williams (The Lawyer, 6 January).
The issue of how much compensation an agent can claim under the Commercial Agents (Council Regulations) 1993 remains as clear as mud. I am not sure it is helpful for the courts to refer to the July 1996 report of the European Commission (as Mr Sidkin reports from the King case). When acting for agents I use the report by referring to the only other EU country with similar compensation provisions to the UK France where apparently agents often receive two years' annual commission as compensation when their contract is terminated (there is no helpful UK case law to date). When acting for principals I refer to the Commission's statement that UK settlements are between three to six months' commission. The Commission also refers to higher UK settlements. Other solicitors often selectively quote to me from the report in correspondence.
In my experience, in the early days agents with few funds to pay lawyers would settle for three to six months' commission as compensation. Now many, particularly those with union backing, start at a year's commission and often receive no more.
Meanwhile, I continue to act for clients who are systematically sacking all their agents such is their fear of the regulations' future impact. At least a sacked employee's unfair dismissal damages have a maximum ceiling (in most cases) and there is no obligation to pay lump sums to the estate on death, unlike with agents. Have the regulations backfired?