The value of compensation

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 under the Commercial Agents Regulations.

Following the award of compensation, the Dutch principal appealed.

In respect of the arguments presented to the Court of Appeal, it was decided that:

1. The fact that the Regulations provide for an agent who retires on the ground of age (by reason of which he can no longer be reasonably required to continue his activities as an agent) to be entitled to compensation does not in turn mean that the compensation is worth anything.
2. It is for the agent to demonstrate that the agency has a value by reference, for example, to the income stream which flows from it.
3. Conversely it is possible that the agency will have a low or no value.
4. If, however, the principal considers that the agency has no value, the burden is on the principal to demonstrate this.
5. If the principal fails to do so, compensation will be payable and in determining the value of the compensation the judge will take account of the evidence provided.