ONGOING UNCERTAINTY IN COMMERCIAL AGENCY DISPUTES
The Commercial Agents (Council Directive) Regulations 1993 (Regulations) are primarily designed to protect commercial agents. However, they derive principally from French and German law, and so do not fit neatly within the English law of agency. Further, their scope and application is unclear. Three examples are relevant for present purposes. Firstly, they are stated as applying only to the “sale or purchase of goods” but there are often questions about what this definition encompasses. Secondly, they provide for compensation to be paid to a commercial agent upon termination of an agency agreement, but do not prescribe how this should be calculated. Thirdly, they impose good faith obligations on both the principal and the agent, albeit these are drafted in slightly different ways.
There were three High Court judgments dealing with these particular issues in 2016 and this article considers the key lessons from each of them.
Alan Ramsay Sales & Marketing Ltd v. Typhoo Tea Ltd
Alan Ramsay was a commercial agent for Typhoo Tea Ltd (Typhoo). Typhoo entered into email discussions with Mr Ramsay about termination, with those emails marked as being ‘without prejudice’. Mr Ramsay subsequently asserted that certain emails were repudiatory, purported to accept this repudiation (thereby terminating the agency agreement), and claimed compensation.
Could Mr Ramsay rely on the emails and make good his case on repudiation? The judge held he could not. The judge noted that there is no public policy permitting a party to rely on an alleged repudiation made in without prejudice communications. Further, there was an extant dispute about termination which engaged the without prejudice privilege doctrine (where there is no dispute, there can be no protection). In any event, the judge held that the emails were not repudiatory.
Jan-Mar 2017 issue
Burges Salmon