Smith & Ors v Howard and Hallam Ltd

Smith & Ors v Howard and Hallam Ltd

Compensation under Regulation 17 is to be assessed at the date of termination, reflecting the value of goodwill lost by the agents. In this case, the agents' immediate re-engagement by the purchaser of the brand (Equity) on similar terms reduces but does not eliminate their loss. The appropriate compensation is 12 months' average gross commission, calculated over the last three representative years, with credit for payments already made.

Parties
Claimant: Smith, Bailey, Palmer; Defendant: Howard and Hallam Ltd
Jurisdiction
England and Wales
Judgment Date
14 November 2005
Procedural Posture
Civil (commercial Agency) / Judgment After Trial
Outcome
Claim allowed in part; compensation awarded to claimants.
Legal Topics
Commercial Agents' Compensation, Termination of Agency Contracts, Interpretation of EU Directives, Goodwill Valuation, Regulation 17 Commercial Agents (council Directive) Regulations 1993
Commercial Law Agency Law European Law Commercial Agents' Compensation Termination of Agency Contracts Interpretation of EU Directives Goodwill Valuation Regulation 17 Commercial Agents (council Directive) Regulations 1993

Case Brief

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Parties

Smith, Bailey, Palmer

Claimant

Howard and Hallam Ltd

Defendant

Procedural Posture

Civil (commercial Agency) / Judgment After Trial

Legal Issues

  1. 1 What is the appropriate measure of compensation under Regulation 17 of the Commercial Agents (Council Directive) Regulations 1993 upon termination of the claimants' agency contracts?
  2. 2 Should the compensation reflect a fixed multiplier (such as two years' commission) or be determined flexibly based on the facts?
  3. 3 Does the continuity of agency with the new principal (Equity) affect the compensation due from the original principal (Howard and Hallam Ltd)?

Ratio Decidendi

Compensation under Regulation 17 is to be assessed at the date of termination, reflecting the value of goodwill lost by the agents. In this case, the agents' immediate re-engagement by the purchaser of the brand (Equity) on similar terms reduces but does not eliminate their loss. The appropriate compensation is 12 months' average gross commission, calculated over the last three representative years, with credit for payments already made.

Court Disposition

Claim allowed in part; compensation awarded to claimants.

Orders

  • Defendant to pay first claimant £33,724.80, second claimant £20,497.33, and third claimant £29,870, less payments already made.
  • Court to hear submissions on interest and costs.