Introduction

In December 1986, the Council of Ministers adopted the Commercial Agents Directive (86/653/EEC). The directive was enacted for the dual purpose of: (1) reinforcing the protection of commercial agents; and (2) harmonising national laws regulating the relationship between commercial agents and their principals in order to facilitate trade within the European Union. The first goal has clearly been met, since the directive bestows commercial agents with considerable protection at various stages of their relationship with their principals; most notably, by providing them with a right to claim termination payments. However, harmonisation has not been as successful, principally because the directive left a significant amount of freedom to the (then twelve) Member States in their implementation. Overall, five Articles give freedom of implementation to Member States: the possibility of excluding from the scope of the directive those commercial agents whose activities are regarded as ‘secondary’ by national law (Article 2(2)); the accrual of indirect commission (Article 7(2)); the form of the contract (Article 13(2)); mandatory notice periods (Article15(3)); immediate termination (Article 16(b)); and termination payments (Article 17). Nonetheless, considering the huge disparity which existed between national rules on commercial agency prior to the directive, this freedom was undoubtedly inevitable. It is now more than fifteen years since the directive was implemented (aside from the Member States joining in 2004 and 2007), and a body of cases from the European Court of Justice (ECJ) is slowly emerging. Clarification by the ECJ has been sought in three main areas: namely, the definition of a commercial agent; indirect commissions; and termination payments. The aim of this chapter is to review each of these areas in turn in order to see whether interpretation by the ECJ has helped correct some of the drawbacks of the directive.

Commercial agents:

Article 1(2) of the directive defines a commercial agent as ‘a self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of another person, hereinafter called the principal or to negotiate and conclude such transactions on behalf of and in the name of such principals’.