Do the Commercial Agents Regulations 1993 have a future in Great Britain post Brexit?
The answer is Yes.
The Commercial Agents Regulations 1993, SI 1993/3053, are EU-derived domestic legislation made under section 2(2) of the European Communities Act 1972. Section 2 of the European Union (Withdrawal) Act 2018 (as amended by section 25 of the European Union (Withdrawal Agreement) Act 2020) provides that EU-derived domestic legislation, as it has effect in domestic law immediately before BREXIT day, continues to have effect in domestic law on and after BREXIT day.
As such, the Commercial Agents Regulations 1993 will continue to apply after the end of the Brexit transition period, unless and until the UK Parliament decides to modify or repeal them.
The common law principal of agency has been developed over the years through the English courts, independently of any EU membership or EU legislation which has otherwise come into effect.
Whilst the UK common law principals of agency continue to unaffected by Brexit, the main piece of legislation currently in force in this country affecting commercial agency are the Commercial Agents (Council Directive) Regulations 1993 (the “Regulations”). The Regulations that implemented the EU Directive has been absorbed into law in England, Wales, Scotland & Northern Ireland.
What is the intention in relation to these rights after Brexit?
In accordance with European Withdrawal Act 2018 and, of course, subject to the final deal that is agreed (!!) , as the Regulations are national law, the Regulations will remain in force immediately after Brexit.
However, the Regulations do originate from an EU Directive, and there has been some commentary that the Regulations give agents too much protection, particularly in relation to the right to compensation for arranging matters, even where they are not continuing as an agent for the principal.
As such, there may well be pressure on the government to look at withdrawing or at least significantly modifying the Regulations.
This is arguably only likely to occur following a formal consultation on the subject, which would allow UK principal and agency businesses the opportunity to make representations on the subject before any steps are proposed.
However, whilst the Regulations are protective for agents, & establishes the ground rules for a good Agent / Principal relationship, it should not be ignored that there have been thousands of statutory instruments importing some element of EU law over the years.
This means that it could take years post Brexit for the government to review these to consider whether and to what extent the UK would wish to retain these laws.
Further, clearly the UK will continue to trade with the EU, and removing protections for UK agents may well leave such agents open to abuse by EU manufacturers, whilst leaving UK manufacturers obliged to pay in respect of the existing rights to EU-based agents. This clearly would not result in a satisfactory outcome.
It should be noted that in the ten year period between 1994 and 2014, some 4,283 statutory instruments importing an element of EU law were passed by the UK Government.
The Regulations are just one of thousands that will need to be analysed by the UK Government’s lawyers over the coming years post Brexit and I suspect that if there is a “bonfire of red tape” the Regulations will be a long way down the list.