What Should Commercial Agents Do If Their Commission Isn’t Paid?

What do I do if my principal doesn’t pay me the commission due? 

One of the most common issues faced by commercial agents is non-payment of commissions by principals.  

Steps to Take If Your Principal Isn’t Paying Commission 

If you suspect your principal isn't paying your commission fully or correctly: 

1. Request Detailed Sales Information: You're entitled to request detailed sales data from your principal to verify commissions owed.
2. Engage in Discussions with Your Principal: Clearly document your concerns and formally request clarification or payment. 
3. Seek Legal Advice Promptly: If discussions don’t resolve the issue, consult legal experts immediately. You have rights under the Commercial Agents Regulations, and specialist solicitors can help enforce them. 
4. Consider Legal Action or Termination: If payment is withheld unjustly, you may have grounds to terminate your agency agreement while preserving your right to claim compensation or an indemnity under the Commercial Agents Regulations. 

How much commission should a commercial agent receive? 

At the outset of the commercial agency relationship, the agent and principal should agree on the amount of commission to be paid. The commercial agent and principal can also agree to vary the amount of commission paid during the agency relationship, if desirable. 

If the principal seeks to change the agent’s commission structure, the agent may be able to resist such a change depending on the terms of the commercial agency agreement. 

• Set Clear Terms Early: Agree clearly and explicitly in writing how your commission is calculated. 
• Variation During the Relationship: Both parties may agree to change the commission structure, but this usually requires mutual consent. 
• Resisting Unfair Changes: If your principal attempts to unilaterally change the commission agreement unfairly, you can legally resist based on the terms of your existing agreement. 

What if my principal goes bust? 

Unfortunately, there are circumstances when principals may face insolvency or liquidation: 

• Claims Against Insolvent Principals: You may still submit claims for outstanding commission or termination payments through the appointed liquidator or administrator. 
• Expectation of Payment: However, the payments you recover may be significantly lower than your original entitlement. Acting swiftly and securing early legal advice can improve your chances of recovering at least partial payments.