Briefing notes

The laws of many countries both within and outside of the European Union entitle a distributor to compensation following termination of the distributorship agreement. In broad terms, this is comparable to the statutory protection given to commercial agents. ...
It is an important question. The rational for any business to use an agent is that the relationship is results based. Unlike a sales representative (where there will also be the issue of national insurance contributions aka employment tax), no sale equals no...
Backhanders are not new. For more than 120 years it has been a well established principle of law that the acceptance by an agent of a secret commission amounted to a breach of the agent’s duties to the principal, regardless of whether the agent acted...
Unsurprisingly the Commercial Agents Regulations are often viewed as the be all and end all so far as a principal’s relationship with his agent is concerned. But a recent High Court case highlights how short sighted this approach can be. The case...
To what extent should brands be able to prevent retail distributors from selling the brands’ products on eBay and Amazon? Last month the Advocate General to the European Court expressed the view that Coty Germany (the luxury beauty supplier behind...
Businesses deciding whether to appoint a commercial agent or distributor may be unaware that an alternative may be found in the European concept of commissionaire agent. But how does a commissionaire agent differ from a commercial agent or a distributor and...
The European Commission has announced that it has launched separate investigations into whether certain distribution practices of Nike, Sanrio (the company behind Hello Kitty), and Universal Studios illegally restrict traders from selling licensed...
“If the Commission finds that there has been an infringement of EU competition law, it will be open to the Commission to impose a very substantial fine. In addition, the actions taken by Guess in respect of its distribution agreements may result in...
American clothing and accessories brand and retailer Guess is under investigation by the European Commission as to whether certain restrictions in Guess’ distribution agreements illegally restrict retailers from selling Guess products cross-border to...
There is an urban myth that if a company appoints an agent on an exclusive basis, the agent can act only for that company and for no other company. The fact that this is an urban myth is shown by replacing: “ We appoint you as our exclusive agent...
It is invariably when a relationship is not going well that lawyers are asked “what can be done?” It is at that point that lawyers try to be creative and look not only at the words written in the distributorship, agency, or other commercial...
Event date: Monday 27 March 2017 Timings: Coffee from 10.00am, Event: 10.30am - 1.00pm followed by Lunch Venue: Grant Thornton UK LLP, 30 Finsbury Square, London, EC2A 1AG You are invited to the FSPA’s Brexit Information Event, where key-speakers are...
For some time there has been uncertainty as to whether or not agents outside the EU can be protected by the EU Agents Directive. The uncertainty dates back to a decision of the European Court of Justice in 2000 when it was decided that a principal...
The UK is one of the world’s most advanced digital economies and this is both a strength and a weakness, according to a report on BBC News on 13 February 2017. Are you reading this newsletter comfortably? But who else is reading it? More particularly,...
Stephen Sidkin, Emma Roake and Rebecca Richardson are speaking at the UKFT seminar 'Working with Distributors and Agents: how to get it right' on 4th April. Read more here:  Working with Distributors and Agents: how to get it right ...
Three recent cases show the risk that suppliers run when trying to rely on the terms of agreements made “on a handshake”. All three suppliers found to their cost that the agreements had either ceased to exist or did not protect them in the way...
A distributorship agreement often allows a distributor a certain period of time, following termination of the agreement, in which to sell-off the remaining stock which it has been distributing. At the end of the sell-off period, unsold stock may be required...
Please see below for three podcasts from our agentlaw seminar on 9 November 2016. Topics include:  House accounts and taking back customers from agents and distributors -   Laura Monro , Associate The don'ts and possible do's of price...
It is a fundamental tenet of English Law that an agent will not prefer his own interest or the interest of another principal above that of the first principal for whom the agent is acting. It follows that if an agent acts for one principal, he cannot act...
Determining the compensation payable to an agent on termination of an agency agreement is not a straightforward business. The Commercial Agents Regulations (the “ Regulations ”) fails to provide a definitive formula. But is that changing...
Fixed or minimum prices are considered by the Competition and Markets Authority (CMA) to be the most serious form of anti-competitive behaviour. However, the CMA recognises that in certain circumstances even anti-competitive agreements can produce...
Stephen Sidkin will discuss the effect of Brexit and what it means for Agency and Distributorship Agreements at the UIA Munich seminar on 9 September 2016. See PDF to the left for the full programme.  ...
Recently we focused on the substantial fines imposed by the Competition and Markets Authority on two suppliers which had attempted to impose minimum prices on online resellers of their products.  This is what is known as vertical restrictions on prices...
At around the time of last month’s EU referendum, the Competition & Markets Authority (the UK’s competition watchdog) published guidance materials for suppliers, distributors, and retailers on the thorny issue of price-fixing. Given the...
The High Court has today given judgment in the claim brought by The Software Incubator Limited (TSI) against Computer Associates Limited (the UK subsidiary of Nasdaq listed CA Inc.).   TSI acted as the commercial agent of Computer Associates before its...
The European Agents Directive provides many rights and protections for commercial agents.  One such right is the entitlement of an agent on termination to indemnity unless the agency agreement has been terminated as a result of breach by the agent. ...
The reason why the principal may take back a customer is, sometimes surprisingly, not appreciated by principal and agent alike.  Customer complaints resulting in a principal doing the work but still paying commission to the agent is obvious. Less so...
A judgment given in a recent case before the High Court provides a reminder to principals of a fundamental point to remember when considering how to proceed in the face of a serious breach of the agency agreement by the agent. The case concerned an agency...
Does the nature of the relationship really matter? A recent judgment of a Spanish Court of Appeal brings home again how trading relationships can morph into a distributorship arrangement and the consequences which can follow. In this case, the parties had a...
The entitlement of an agent under the Commercial Agents Regulations to indemnity or compensation on termination is well known. Also well known is that under the Regulations indemnity is capped.  But less well known is that the Regulations also give a...
The Commercial Agents Regulations provide principal and agent with a choice when it comes to termination of the agency agreement - is the agent to have an entitlement to uncapped compensation or a capped indemnity? The Regulations require the parties to...
When drafting a distributorship agreement it is common to include minimum purchase requirements on the distributor. Such requirements bolster the other performance obligations on the distributor. As a supplier it would be entirely unsatisfactory to appoint a...
Ever wondered whether the non-compete restrictions in your agency agreement can be relied on to work? For sure principals and agents will have different interest in wondering. But some of the mists of uncertainty have cleared following a very recent Court...
We are now located at our new office at 10 Finsbury Square, just a few minutes’ walk from our previous location in Dominion Street. 10 Finsbury Square is a new, environmentally friendly building, well positioned for our clients and with excellent...
For principals, the general rule is that providing in the agency agreement for the agent to receive on termination an indemnity payment under the Commercial Agents Regulations is safer, because an indemnity payment will be capped at the average annual...
The Commercial Agents Regulations set out the rights and duties of commercial agents. Some of these rights and duties are subject to various time periods.   The time period for notice to terminate the agency The Regulations set out the minimum...
Even successful and productive distributorship relationships may well run their course at some stage. Certainly a breakup can be messy at the best of times and the situation can become even murkier should there not be a written agreement between the parties....
Agents understandably think that it is good. Principals unsurprisingly are at best ambivalent towards it. But love it or loath it, with the publication on 17 July of the EU Commission report on its year long consultation into its effectiveness...
Whichever way Greeks vote in Sunday’s referendum, the impact of Greece’s financial position on trade with Greek companies will continue for some time. Selling to Greece? Sellers to Greece who have taken advantage of credit insurance...
German law provides for the enhanced protection of franchisees and, in particular, provides that a franchisor must fully inform a potential franchisee about the profitability of the proposed franchise during contract negotiations prior to the conclusion of...
When being appointed as a distributor in a given territory, it would be easy to celebrate the appointment and not consider the potential intellectual property issues which should be addressed.  Although not the supplier of the products, a distributor...
Enjoy paying tax?  Unlikely.  But it would be galling if use of an overseas agent or distributor resulted in a permanent establishment, and so a taxable presence in that overseas jurisdiction. If care is not taken, and the arrangements do give...
A business which uses sales agents to sell its products is dependent not only on the commercial strength of its products but on the success of its sales agents.  In an increasingly competitive environment, it is crucial for a business to ensure that it...
Fox Williams LLP with UK Fashion and Textile Association will be holding a seminar on Tuesday, 12 May, designed specifically for fashion and textile businesses in the UK​. Tuesday 12 May 2015 4pm - 6pm UKFT, 3 Queen Square, Bloomsbury, London, WC1N...
A recent Spanish Court of Appeal judgment provides an important reminder for suppliers and distributors that the employees of a terminated distributor can transfer automatically to the supplier under EU law. The law in question is the EU Acquired Rights...
Should be easy.  What can go wrong?  Become appointed as exclusive distributor for the territory.  Appoint agents in those parts of the territory which it does not make sense to have a sales office or sales representative.  Agents take...
It is usual in a distributorship agreement for either the agreement itself to set out the terms upon which the products are sold by the supplier to the distributor, or to refer to the standard terms and conditions of sale of the supplier. In both cases such...
As your domestic business grows, you may consider expanding overseas.  With reference to this, an easy way to achieve international reach is to appoint distributors in other countries.  You can gain access to a new market by taking advantage of the...
Fox Williams Partner Stephen Sidkin will be speaking at this year's GIMA Day Conference on  Wednesday,  15th April, 2015. Please see below for details and how to reserve your place.  GIMA Day Conference 11am start  ...
The view is often expressed that agency law is the same throughout the European Union as the EU Agents Directive has been implemented into the laws of all 28 member states. Whilst much of the 28 national laws are very similar, differences remain. ...
One of the biggest areas of dispute between a principal and agent can arise when an agent has a large territory which the principal considers is not producing the results it expects.  At the outset of the relationship an agent will normally look to...
When negotiating an international agency or a distributorship agreement, you should think carefully about the country in which you want any disputes arising out of or in connection with the agreement to be resolved, if that eventuality should ever arise and...
No matter the intention of the parties at the start of a relationship, there always comes a time when one party to an agency agreement wishes for it to come to an end. How easy or otherwise it is for the party who wishes to bring the agreement to an end to...
Fox Williams with UK Fashion and Textile Association will be holding a seminar on  Tuesday,  2nd  December, 2014.  C reated specifically for fashion, accessory, and textile businesses in the UK, this seminar will give you the...
The ability of an agent to retire on the grounds of age, illness or infirmity and claim compensation or indemnity under the Commercial Agents Regulations continues to surprise many principals.  The fact that the estate of a dead agent has the same right...
The Commercial Agents Regulations define a commercial agent expressly by reference to “goods”.  As such, there has been a question mark as to whether an agent who obtains orders for software can be an agent under the Regulations.  ...
At our seminar this year we are delighted to welcome Charles Shearman as our chairman for the evening and Paul Brown of AgentBase who will explain how the UK’s leading sales agent register can help your business.  We will also investigate...
The latest decision of the Court of Appeal concerning the compensation payable to an agent highlights certain issues which are sometimes overlooked. The case concerned a UK agent who had retired on the grounds of age. Eventually he claimed compensation...
This article was originally written for and featured in S olicitors Journal The decision in Fern Computer Consultancy v Intergraph Cadworx & Analysis Solutions Inc [2014] EWHC 2908 represents a reversal of the old maxim that as one...
Distributors should be drinking to success following the European Court’s decision in favour of a Belgian distributor, determining which courts have the right to hear a dispute relating to a distributorship agreement. The facts The distributor,...
One of the main missions of an agent is to obtain orders – the more the better for both principal and agent.  An agent may well be assessed periodically on his sales performance and a lack of orders or substantial drop in orders will often spell...
As might be said at a World Cup, messi instructions are best avoided. Agency relationships are no exception.  We frequently advise principals and agents in respect of contractual relationships which have either started on uncertain terms, or which reach...
In a supplier / distributor relationship the timing of the performance of a party’s contractual obligations can be critical. Often there will be included in a distributorship a provision stating either that: “time is of the essence”...
“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency” (Bill Gates)...
We live in a global village.  The trouble is that every street, road, and lane has its own laws.   The world’s countries are no different.  But the situation is made more complex when a country decides that a particular law has...
For years it has been the case that distributors are the poor relation of agents when it comes to legal protection. But this position was altered substantially last year by the High Court. In deciding that a duty to act in good faith and fair dealing could...
As set out in the last issue of agentlaw news , it is possible with careful planning at the outset of an agency relationship to limit the agent’s entitlements on termination to commission on orders placed both before and a reasonable period of time...
Fox Williams LLP is now able to offer a new type of litigation funding.  Available for commercial contract disputes, our agreement with the funder has extended the funding to certain (but not all) claims made by agents under the Commercial Agents...
In years to come students may be asked to compare and contrast the Austrian Anschluss in March 1938 with what has happened in March 2014 in Crimea. But unlike 76 years ago, fashion brands are much more global and those trading in Russia and Ukraine may well...
Agency agreements, unlike distributorship agreements, do not give rise to competition law issues. Correct? Genuine The answer is largely so in the case of “genuine” agency agreements, that is where the agent bears no, or only insignificant,...
The Commercial Agents Regulations provide that an agent will either be entitled to a compensation payment or an indemnity payment on termination of the agency agreement in most circumstances.    These alternative awards are calculated very...
Generally on termination of a commercial agency agreement the main area of exposure for a principal will be post-termination compensation or an indemnity payment. But such exposure can be avoided or at least reduced in some situations. In contrast, the...
Fox Williams with UK Fashion and Textile Association will be holding a seminar on Wednesday 19 March designed specifically for fashion, accessory and textile businesses in the UK. This interactive seminar will give you up to date information to enable you to...
Fox Williams’ Steve Sidkin will be speaking at the Selective distribution seminar on 26 March 2014. If you would like more information please contact jane@sportsandplay.com ...
1 January 2014 saw the 20 th anniversary of the coming into force of the Commercial Agents Regulations. Whilst it might have been expected that after such a period of time that the Regulations and their effect would be well known, it is the case that urban...
In England and Wales the Commercial Agents Regulations allow principals and agents to elect as to whether an indemnity will be payable on termination (excepting a termination for breach by the agent).  If there is no election, then compensation is...
Unlike a commercial agency agreement, where the minimum periods of notice necessary to end the agency agreement are laid down in the Commercial Agents Regulations, there is no statutory fixed period of notice to terminate a supply or distributorship...
I have returned from holiday to find a High Court claim from a former agent.  We dismissed him over a year ago so I had assumed he had decided not to take matters any further. At the time, we dismissed him with immediate effect for his failure to carry...
There is often an argument between parties on termination of an agency agreement in respect of the amount of compensation or indemnity owed by a principal to an agent. Unfortunately for principals, a decision of the European Court in October 2013 has created...
Over the last 20 years there have been times when principals, agents, and lawyers have scratched their heads as to the how and why of the Commercial Agents Regulations. Based on the EU Agents Directive, for many the Regulations just fell to earth with...
Almost 20 years after the Commercial Agents Regulations first came into force, issues continue to arise as to how to calculate the compensation payable to the agent on termination of the agency agreement.  Although the House of Lords’ decision in...
At our seminar this year we welcome Fergus Randolph QC who will speak about how UK principals may find themselves liable to their non-EU agents. We also look at potential issues that may arise in agreements and provide an update on recent case law. ...
“One person in four has paid a bribe to a public body in the last year, according to a survey carried out in 95 countries by Transparency International.” GlaxoSmithKline is currently feeling the heat with allegations that agents and sales...
“Data protection” and “misuse of personal data” are phrases which are thrown around without much consideration being given as to what they mean.  But given the Data Protection Act 1998’s wide definitions of the...
Whilst sanction regimes were brought in with the intention of protecting businesses from the damaging effects of criminal activities conducted by others, they are increasingly stifling international trade – albeit inadvertently. UK companies use...
In April 2013 changes to the Court rules came into effect.  They are intended to reduce litigation costs. The end to recovery of after the event insurance premiums and success fees and the introduction of damages based agreements (where a solicitor can...
This article was originally written for and featured in Packaging News . Slowly but surely English court judgments are turning to favour distributors. The latest case to do so featured Manchester United branded fragrances and toiletries which were...
This article was originally written for and featured in Childrenswear Buyer . Given today’s economic pressures on businesses, thoughts by franchisors about ending franchises are entirely understandable and natural.  Unlike the lobster that...
Witness statements are a crucial part of any case. Their purpose is to show the case in its strongest light.  Indeed, a case may be won or lost on the strength of the witness evidence and (assuming the case goes that far) the performance of the witness...
Disclosure. A key stage in the litigation process.   Following both parties putting their best foot forward in their statements of case, where they set out the legal arguments upon which they are relying and a summary of the facts, this is where they...
It may sound obvious, however if you switch business mediums from a partnership to a company, or vice versa, ensure that your agency agreement is also transferred to the new entity.  In the recent case Barnett Fashion Agency Limited v Nigel Hall...
April Fool's Day 2013 was no joke when it comes to litigation.   The 'Jackson Reforms' (named after Lord Justice Jackson) saw a variety of changes to litigation. The most significant of these changes impact the ways litigation can be...
The law provides for an agent to be entitled to claim compensation or an indemnity on the termination of an agency agreement (subject to a number of exceptions).    If an agent has a right to claim compensation (as opposed to an indemnity...
This article was featured in Packaging News and Footwear Today . Whisper it ever so quietly.  But will George Osborne increase employer’s national insurance contributions in the upcoming budget? At present, a packaging manufacturer or...
Over the past decade the way that we shop has changed.  Ten years ago you might have bought the odd thing online but this would have been a rare occurrence with the majority of purchases being made in store in person.  But fast forward to today and...
It is a truth universally acknowledged that a principal who appoints an agent may find itself in need of some legal advice.  This frequently occurs because the agent has been up to no good.  The agent may have been acting for a competitor, or...
What is disclosure? Disclosure is the stage in litigation at which each party is required to disclose to the other party all documents in its possession or control, which are relevant to the case. If you get caught up in litigation with your agent or...
The Commercial Agents Regulations require an agent to act “dutifully and in good faith” and impose an obligation on the agent to look after the interests of his principal in performing his activities. Where an agent has been underperforming, and...
Agents and Distributors in Fashion Tuesday 19 March - 4.00pm to 6.00pm The three ages of an agent (with apologies to Titian) and Why taking back exclusive rights from a distributor may not be such a smart move The three ages of an agent ...
This article was originally written for and featured in Footwear Today . In a difficult economic environment the importance of successful distributors cannot be overstated.  But all too often experience shows that whilst the brand may be a wow and...