Legal Working Group

The Members of the IUCAB LWG assembled at the offices of ReedSmith for their December 2010 meeting. The meeting was hosted by Mr. Edward Miller, Partner at ReedSmith and legal advisor of MAA (IUCAB Member Association of the UK and Ireland).

The LWG addressed the question raised by the Greek Member Association FICAB regarding measures to be taken for limiting the risks of commercial agents to be left with unpaid commissions after bankruptcy of a principal. With a view thereto FICAB suggested that IUCAB starts lobbying for an amendment of Art. 10 and 12 of EC Directive 86/653. Having considered that Art. 10 (3) prescribes that commissions due shall be paid not later than on the last day of the month following the quarter in which it became due and Art. 11 (3) which allows commercial agents and their principals to agree on shorter payment terms, the LWG will advise FICAB to start a consultation round with the Greek national legislator whereas the Greek legislator at the time of implementation of the Directive has chosen not to provide for shorter commission payment terms than the maximum term admissible under the provisions of the Directive. Legislators of many other EU-Member States have, however, provided for shorter payment terms than this maximum term admissible under the Directive. Regarding the position of commercial agents who are left with unpaid commissions after bankruptcy of a principal, it is up to national legislators to allow a preferred status to certain types of creditors.

A number of the IUCAB Associations are in the process of lobbying with their national legislators in order to achieve that commercial agents obtain such a preferred status and the Greek Association is advised to take similar action towards their national legislator.

The LWG discussed and positively reacted to the ECJ Judgment of 11th March 2010 (Case C-19/09) in which it was ruled that claims for compensation after termination of a commercial agency contract performed in several Member States, the jurisdiction (in absence of a contractual jurisdiction clause) is decided by the place of the main provision of services by the agent or, where it cannot be established on that basis, by the place where the agent is domiciled.

The LWG furthermore examined the ECJ Judgment of 28th October 2010 (Case C-203/09) in which it was ruled that the Directive 86/653 precludes a self-employed commercial agent from being deprived of his indemnity after termination where the principal establishes a default by that agent which occurred after notice of termination of the contract was given but before the contract expired and which was such as to justify immediate termination of the contract. The LWG welcomed this ruling but has concerns about a consideration made by the ECJ according to which the agent’s conduct may be taken into account in the assessment made to determine the fairness of the indemnity.

The LWG also extensively discussed the Commission’s Green Paper on European Contract Law. The position of the LWG regarding this matter remains that any initiatives for European Contract Law should not extend to B to B contracts.
Finally the LWG dedicated time to the preparation of a Fact Sheet on the new European rules on Vertical Agreements which entered into force in May 2010.

The next meeting of the LWG will be held in Berlin at the CDH Headquarters on Friday 15th April 2011.

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