Agency

Self-employed intermediaries promoting principals' business - aim of EU Directive to protect self-employed agents - activities of agents not secondaryTamarind International Ltd and Others v Eastern Natural Gas (Retail) Ltd and Another.

QBD (Morison J.); 12 June 2000

In a claim by the claimants for compensation against the defendants on agency contacts for promoting the defendants' gas and electricity business as telesale commercial agents, preliminary issues were ordered to tried, among other things, as to whether the activities of the claimants were to be considered 'secondary' so that by reg.

2(4) of the 1993 regulations, the activities were outside the regulations.

The defendants contended that the answer to the question did not depend on the amount of business the agents had generated for the defendants and thus the activities of the claimants were secondary and the regulations did not apply to them.Nicholas Green QC, Dominic Chambers and Jemima Stratford (instructed by SJ Berwin & Co) for the claimants; Nicholas Stadlen QC, Jonathan Nash and Jonathan Davies-Jones (instructed by Masons) for the defendants.

Held, that the aim of the Directive was to protect agents by giving them a share of the goodwill which they had generated for the principals' business after the agency agreement had been terminated so that the agents to whom the regulations applied were entitled to compensation for unjustifiable termination of the agency agreements by the principal; that since the defendant had received a substantial measure of future goodwill through the activities of the agents with the likelihood of deriving long term benefits from their agents' efforts in developing the gas and electricity markets, the purpose of the EU Directive had been better fulfilled; and that, accordingly, the agents's activities were protected by the regulations