Commercial Agency law: Gledhill v Bentley Designs

I made a bit research on a case and as I found it very interesting I want to write about it!   

The very recent case of Gledhil v Bentley Designs has played an important theme in Commercial agency law.Mr Gledhil was an agent for Bentley Designs for 17 years. He was their best commercial agent earning £85,000 a year from them in commission. In 2006 the company informed its agents that they should have to use eimail for future communications.

However, Mr Gledhil continued to use fax and phones and refused to comply with the instructions of the company despite multiple request to do so. As a result the company offered Mr Gledhil personal training as to the use of eimail and stated that if Mr Gledhil again fail to comply with the requests of the company he would be charged a monthly administration fee of  £100. Unfortunately, Mr Gledhil responded to the managing Director by verbally abusing him over the phone and the voicemail. Because of these actions and the fact that he refused to apologise, the company with no other choice decided to terminate his agency agreement.

Under the "commercial agency regulations" if the reason for the agency agreement termination is because the agent has failed to carry out all or part of his/her obligations under the agreement,an agent will not be entitled to compensation or indemnity on the termination of an agency agreement. The court held that Mr Gledhil was not entitled to any indemnity or compensation from the company because of the way in which he had spoken to the managing director and the  court held in favour of the company.

But the company would have been at less risk of making a substantial payout to him if the company had terminated the agreement due to his substantial failure to comply with the policy which they had imposed!

I strongly agree that this is a much clearer breach of the agency agreement and the company could easier defend its actions based on these grounds. The relationship between the principal and the commercial agent can be very complex. An agency agreement can be terminated by the  principal and for the principal where the agent is at fault or where he/she has acted  in "bad faith". The problem often lies in the interpretation.

• For further reading: 

   http://legal-news.ashbycohen.co.uk/
  The Commercial Agents (Council Directive) Regulations 1993 clause 17 & clause 3(1),(2)(http://www.legislation.gov.uk/uksi/1993/3053/regulation/17/made,http://www.legislation.gov.uk/uksi/1993/3053/regulation/3/made)
  transcript of the judgement : (http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWHC/Mercantile/2010/B8.html&query=gledhill&method=boolean)