On 13 February 2025, the UK government confirmed that the Commercial Agents (Council Directive) Regulations 1993 will remain unchanged. This decision follows a public consultation initiated under the previous government on 16 May 2024.
Commercial agents are self-employed intermediaries authorised to negotiate the sale or purchase of goods, but not services, on behalf of their principals. The Regulations establish minimum rights for commercial agents concerning their work with principals, including entitlement to compensation.
Context and review
The Regulations have been in effect since 1 January 1994 and were reviewed as part of the UK's broader evaluation of retained EU law under the Retained EU Law (Revocation and Reform) Act 2023. The then government commented that the UK had opposed the EU Directive when it came in, regarding it as unnecessarily burdensome on businesses. The consultation aimed to assess whether these Regulations still serve UK businesses effectively post-Brexit.
Key considerations included whether to disapply the Regulations for new commercial agency agreements to simplify the legislative framework and develop bespoke UK laws. The consultation also explored whether removing these Regulations could streamline business contracts and reduce court involvement in interpreting the rules. The consultation asked questions including:
- the extent to which respondents understand the impact of the Regulations
- how important the protections under the Regulations are
- whether deregulating would reduce or increase the ability for agents and principals to contract
- whether deregulation would reduce or increase disputes between agents and principals
Consultation feedback
The consultation garnered 86 responses with a range of opinions:
- Support from agents: many commercial agents supported retaining the Regulations, citing benefits such as provision of default contractual terms in the absence of agreement, providing employment protection for sole traders, and offering a framework for engagement with principals.
- Concerns from principals: some principals viewed the Regulations as restrictive and biased towards agents.
- Other comments: other respondents highlighted that the Regulations help level the playing field between large and small businesses and facilitate operations within the EU market.
Government decision
After considering all feedback, which was described as "polarised", the government concluded that both commercial agents and principals understand these Regulations well, and that they provide necessary protections for agents. While the government acknowledged that some respondents raised concerns that the Regulations restrict commercial agents and principals from freely negotiating terms, this was not considered to be an issue significant enough to require a change in the law. As such, no changes will be made.
What does this mean for you?
Principals and agents now have clarity that both existing and new commercial agency arrangements will continue to be governed under these unchanged Regulations. They should use this opportunity to reacquaint themselves with their respective obligations and rights under these rules.
