When a commercial agency relationship ends, particularly if the termination was unexpected, commercial agents are often left facing a significant loss of income, just at the moment they may need legal support the most. Fortunately, the Commercial Agents (Council Directive) Regulations 1993 offer valuable protections, including the right to claim compensation or an indemnity.
But how do you make a claim? Can you afford to? And do you have to go to court?
In this blog, our Dispute Resolution Lawyers walk you through:
- How to fund legal proceedings, including when “no win no fee” (CFA) arrangements might be available
- What steps to follow when bringing a commercial agency claim
- The deadlines you must observe to protect your entitlement
- Whether you’ll need to go to court — and the role of mediation and negotiation
- Why early legal advice is key to maximising your claim and reducing stress
How can you fund legal proceedings, and do you offer CFAs (no win no fee agreements)?
We recognise that if an agent has had their agency unexpectedly terminated, the agent will have lost all or a significant part of its income and may not have the funds to pay for legal advice.
Myerson is able to offer agents and principals “no win no fee” agreements (technically known as conditional fee agreements) in some cases. This will depend on the circumstances of the dispute and the merits of the client’s position, we will discuss funding options with you at the outset of your matter so that you can consider all options and decide what is right for you.
How to Make a Commercial Agency Claim
The Commercial Agents Regulations provide commercial agents with rights during the agency agreement and upon its termination.
If the agency agreement is terminated the agent will usually have the right to bring a claim for compensation or an indemnity payment as well as other entitlements. It is advisable for agents to seek specialist legal advice on how to calculate their entitlements and advance claims against the principal.
The court rules require the agent to formally set out their claim for entitlements in writing and allow the principal a reasonable opportunity to respond. If the principal is receptive to Alternative Dispute Resolution, an early settlement may be achievable. If, however, it is not possible to settle the claim, the agent may need to issue court proceedings against the principal. We would always recommend an agent takes legal advice before commencing court proceedings.
When Must You Bring Your Claim?
The agent will have six years from the date of termination of the agency agreement to commence court proceedings.
The Regulations also require that if an agent seeks to bring a claim for compensation or an indemnity payment, they must notify their principal of their intention to bring this claim within one year of termination of the agency, otherwise the entitlement to compensation or an indemnity payment is lost. Whilst the Regulations don’t prescribe any particular form of notice, it is advisable for agents to put the notice in writing to avoid any challenge.
Will You Have to Go to Court?
In some cases, it may be necessary to issue court proceedings to resolve a dispute between an agent and principal. However, in most cases court proceedings will not be necessary. Most disputes between agents and principals are resolved without having to issue court proceedings. Mediation is often successfully used to settle agency disputes.
Even where court proceedings are issued, in our experience, it is unlikely that a claim will continue through to trial since the majority of cases settle prior to trial either through negotiation or mediation.
Why Choose Myerson Solicitors for Your Commercial Agency Claim?
Myerson Solicitors’ specialist Dispute Resolution Team provides expert guidance and representation in commercial agency disputes. Our commitment to clear advice, transparent funding options, and a strong track record of successful resolutions positions us as your ideal partner.
Need Advice From Our Experts?
If you would like more information on funding and making a claim, our expert Dispute Resolution Team can help you understand your rights and find a route foward:
0161 941 4000
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Robert Brothers
Senior Associate
Rob has 7 years of experience acting as a Dispute Resolution solicitor. Rob has specialist expertise in professional negligence disputes, shareholder and partnership disputes, complex contractual disputes, intellectual property, reputation management and commercial agency claims.
About Robert Brothers