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Compensating commercial agents

By: Series: New Law Journal ; 151(7009) 23 November 2001, 1739-1741(3)Publication details: 2001Subject(s): Summary: The EC Commercial Agents Directive (86/653) ensured that commercial agents would be entitled to compensation on termination of agency relationships. A recent judgement by the Scottish Court in King v Tunnock appeared to have resolved problems of the amount of compensation by following the French practice of awarding the agent 2 years gross commission. However it is becoming clear that the French approach will rarely produce a fair result and while Scottish courts must follow King until it is over-ruled, English courts need not do the same. Until an effective precedent is created, compromise would seem to the safest recommendation as the likely compensation award is highly uncertain.

The EC Commercial Agents Directive (86/653) ensured that commercial agents would be entitled to compensation on termination of agency relationships. A recent judgement by the Scottish Court in King v Tunnock appeared to have resolved problems of the amount of compensation by following the French practice of awarding the agent 2 years gross commission. However it is becoming clear that the French approach will rarely produce a fair result and while Scottish courts must follow King until it is over-ruled, English courts need not do the same. Until an effective precedent is created, compromise would seem to the safest recommendation as the likely compensation award is highly uncertain.