With its extensive experience in agency law, Addleshaw Goddard's Commercial team has been closely monitoring the Department for Business and Trade's consultation on the potential repeal of the Commercial Agents (Council Directive) Regulations 1993. In this article, the team shares its views on the announced outcome of this consultation and what it means for principals.
Having consulted on whether to retain the Commercial Agents (Council Directive) Regulations 1993 (CARs) in force, the Department for Business and Trade (DBT) has announced the results of that consultation.
Based on a careful review of the 86 responses received to the consultation (70% of which were from agents), DBT states that the Government’s policy is that the CARs are to remain in force without amendment.
DBT stated that, on balance, feedback from the consultation shows that the CARs work well for commercial agents and that the CARs were well understood by respondents. DBT states that the CARs provide protections to commercial agents when negotiating contracts with principals who are, in many cases, businesses larger than the commercial agents themselves.
This will be disappointing to many who had hoped that this piece of EU-derived secondary legislation would be swept aside in consequence of Brexit. The conclusion is also interesting when viewed through the lens of Government's growth agenda: it could credibly be argued that sweeping away the CARs would have yielded significant advantages for the UK economy.
Principals will accordingly need to continue to be aware of the CARs, and in particular the spectre of very substantial compensation on termination, if appointing agents.
For further insights and how this may impact your business or clients, please contact Jonathan Davey.
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