King (AP) v T Tunnock Ltd [2000] ScotCS 70 (16 March 2000)

King (AP) v T Tunnock Ltd [2000] ScotCS 70 (16 March 2000)

Compensation under Regulation 17(6) is payable for the loss of the value of the agency at the date of termination, regardless of whether the principal continues to benefit from the agent's activities. The French approach, which values compensation as two years' gross commission, is persuasive and aligns with the Directive's harmonisation objective. The appellant is entitled to compensation assessed on this basis, in addition to payment in lieu of notice.

Citation
[2000] ScotCS 70
Parties
Pursuer and Appellant: Douglas King (A.P.); Defenders and Respondents: T. Tunnock Limited
Jurisdiction
Scotland
Judgment Date
16 March 2000
Procedural Posture
Appeal From Sheriff Court / Appeal Judgment by Extra Division, Inner House, Court of Session
Outcome
Appeal allowed
Legal Topics
Commercial Agency, Compensation on Termination, Interpretation of EU Directives, Harmonisation of Law, Statutory Compensation Vs. Common Law Damages
Commercial Law Employment Law European Union Law Commercial Agency Compensation on Termination Interpretation of EU Directives Harmonisation of Law Statutory Compensation Vs. Common Law Damages

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Parties

Douglas King (A.P.)

Pursuer and Appellant

T. Tunnock Limited

Defenders and Respondents

Procedural Posture

Appeal From Sheriff Court / Appeal Judgment by Extra Division, Inner House, Court of Session

Legal Issues

  1. 1 Whether the appellant is entitled to compensation under Regulation 17(6) and (7) of the Commercial Agents (Council Directive) Regulations 1993 upon termination of agency
  2. 2 Proper construction of the compensation provisions in the Regulations and Directive 86/653/EEC
  3. 3 Whether compensation is to be assessed on the French model or by common law principles

Ratio Decidendi

Compensation under Regulation 17(6) is payable for the loss of the value of the agency at the date of termination, regardless of whether the principal continues to benefit from the agent's activities. The French approach, which values compensation as two years' gross commission, is persuasive and aligns with the Directive's harmonisation objective. The appellant is entitled to compensation assessed on this basis, in addition to payment in lieu of notice.

Court Disposition

Appeal allowed

Orders

  • Sheriff's interlocutor altered to award the appellant an additional sum of £27,144 with interest at 8% per annum from 14 July 1994
  • Respondents found liable to the pursuer for compensation in addition to payment in lieu of notice