The Commercial Agents (Council Directive) Regulations 1993 govern the relations between commercial agents and their principals, and apply in relation to the activities of commercial agents in Great Britain (subject, where appropriate, to the application instead of the laws of any Member State of the European Union).
The above Regulations prescribe a binding set of rules which must be applied in respect to all commercial agency relationships, and whereas some of these rules may not be mandatory, many of the most important provisions cannot be ‘derogated’ (deviated) from, including the rules with regard to the agent’s entitlement to an indemnity or compensation on termination. In this, Regulation 19 is relevant, and provides:-
‘The parties may not derogate from regulations 17 and 18 to the detriment of the commercial agent before the agency contact expires’
The effect of Regulation 19 is therefore that any purported disapplication or exclusion in an agency agreement of what would otherwise be the agent’s rights to an indemnity or compensation on termination (or any watering down of such rights, to the agent’s detriment) is invalid.
The above made clear, agents should take note that Regulation 19 only applies to protect agents pre termination of an agency, and so that if an agent were to agree after termination to a settlement of their indemnity or compensation entitlements for an amount which was to their detriment (less than they would otherwise be entitled to) then that would likely be binding and irreversible.