Myerson Solicitors' Commercial Agency specialists are pleased to have secured a substantial settlement for a commercial agent operating in the lighting controls and building technology sector following the termination of a long-standing agency relationship with a UK supplier.
The Background
For several years, our client promoted and sold the principal's products, developed customer relationships, and generated significant sales opportunities across the UK market.
When the agency relationship ended, our client sought advice from Myerson's Commercial Litigation team on his rights under the Commercial Agents (Council Directive) Regulations 1993.
In particular, he believed he was entitled to compensation for the loss of the agency, payment in lieu of notice, and commission on sales generated through his efforts.
The principal disputed the claims and argued that any entitlement was limited.
Amongst other things, it contended that:
- The value of the agency business was significantly lower than our client asserted
- Certain claimed commission payments were not recoverable
- Some transactions fell outside the scope of the agency agreement
- The sums claimed by our client overstated the true value of the agency relationship.
As a result, the parties were far apart in their respective valuations of the claim.
Our Approach
We carried out a detailed review of the parties' relationship, including the agency arrangements, sales history and commission structure.
Drawing upon our experience of commercial agency disputes, we advised our client on his statutory rights and prepared a comprehensive letter before action seeking:
- Compensation under the Commercial Agents Regulations
- Damages for failure to provide the appropriate notice period
- Outstanding commission
- Post-termination commission arising from orders generated through the agent's efforts
- Interest and costs
We then engaged in detailed without prejudice negotiations with the principal's solicitors.
Throughout the matter, our focus was on achieving a commercially sensible outcome whilst avoiding the significant costs and disruption associated with litigation.
The Outcome
Following negotiations, Myerson secured a favourable settlement for our client without the need to commence court proceedings.
The dispute was resolved through a formal settlement deed, bringing all claims to a final conclusion and providing our client with a substantial commercial recovery.
By securing an early negotiated settlement, our client avoided the time, expense and uncertainty of litigation whilst obtaining compensation for the loss of a valuable agency business.
The Commercial Agents Regulations provide important protections for agents when agency relationships end. However, disputes frequently arise regarding compensation claims, notice entitlements, outstanding commission, post-termination commission, restrictive covenants and the valuation of agency businesses.
Our Commercial Litigation team regularly advises both commercial agents and principals on disputes arising from agency relationships and has extensive experience of resolving such claims through negotiation, mediation and litigation where necessary.
0161 941 4000
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Robert Brothers
Partner
Rob has 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