Commission after termination of UK commercial agency
12th October 2010The Commercial Agents Regulations (Reg 8) entitle an agent, in some circumstances, to claim commission for a reasonable period after termination of the agency. Agents are often advised to put in substantial claims under this head. In one case in which we were involved, the agent initially claimed four years post-termination commission. This was on top of compensation for termination!
There are few reported decisions on what is a “reasonable period” for this purpose. In Tigana Limited v Decoro Limited (High Court, 2003)the agent was awarded nine months’ additional commission. In a more recent case – McQuillan v McCormick (High Court, May 2010) – the Judge awarded two months’ additional commission.
It is quite strongly arguable that since the House of Lords’ 2007 ruling in the Lonsdale case, it will rarely, if ever, be reasonable to award an agent any post-termination commission where he also claims and is awarded compensation on termination. McQuillan was such a case, but it appears that this argument was not raised by the principal. So the point still awaits judicial determination.
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