Bulletin Board30th July 2008 Enforcing compliance with an agency or distribution agreement Following on from the item below, here's a new content page looking at the types of order the English courts can make to enforce compliance with an agency or distribution agreement where one party has terminated prematurely, or plans to do so. ------------------------------------------------------------------------------------------------------------------------------
3rd July 2008 What is "reasonable" notice of termination? Where the parties to a distribution agreement, or to an agency agreement to which the Commercial Agency Regulations do not apply, have not agreed what notice of termination must be given, the notice given by either must be reasonable in all the circumstances at the time it is given. Where an "annual planning" modus operandi has been adopted, it may be arguable that a producer will only have a relatively short window each year in which he can reasonably give a notice of termination effective at the end of the following year. For further information see: Dispute Resolution — Independent expert determination It has been held in a recent High Court case that if the parties have agreed that an independent expert's decision will be final then — as long as the expert deals with the issue referred to him, ie answers the right question — his decision will bind them, even if he has made errors (even gross and obvious ones), or he has acted perversely or contrary to "natural justice". For further information, and suggestions on avoiding this problem, see: Commercial agents compensation The first High Court case on the assessment of compensation to be reported since the Lonsdale decision (see below, 4th July 2007) supports the view that when assessing compensation you should deduct notional "market rate" salaries attributable to running the agency where those have not in fact been paid. See:http://www.winelawcentre.com/private/compensation-assessment/#salaries ------------------------------------------------------------------------------------------------------------------------------
4th June 2008 Wine turns green No, it's not about defective products! Sally Easton MW looks at the increasing focus on environmental, ethical and sustainability issues in the wine trade, and to what extent consumers can be confident they're buying what they think they're buying. ------------------------------------------------------------------------------------------------------------------------------- 17th April 2008 We never signed the contract — how could we be bound by it? It's surprising how often in the UK wine trade one party produces a draft agency or distribution contract for the other's consideration, which they have some dialogue about, but ends up never being signed. -------------------------------------------------------------------------------------------------------------------------------
20th February 2008 Entitlement to commission under the Commercial Agency Regulations In 1996 the ECJ held (in Kontogeorgas) that where a commercial agent has "an exclusive right to a specific geographical area or specific group of customers" and the transaction is with a customer "belonging to" that area or group, the agent is entitled to commission even if he played no part in bringing the transaction about. In Chevassus-Marche v Group Danone and others (17th January 2008) the ECJ was asked to extend this "agent-friendly" approach even further, by ruling that an agent is entitled to commission whenever the principal's products are sold to a customer in the agent's designated territory, even though (a) the agent has played no part in the transaction, and (b) someone other than the principal is the seller. A surprising suggestion, at first sight, but arguable. Click below to see what the ECJ made of it: -------------------------------------------------------------------------------------------------------------------------------
17th January 2008 Promotional discounting — everybody happy? How does promotional discounting work in UK wine retail? What funding mechanisms are used, and do all concerned regard them as satisfactory? Andrew Catchpole investigates. -------------------------------------------------------------------------------------------------------------------------------
17th October 2007 The Closure Conundrum For the past decade and more the wine industry has been preoccupied with issues surrounding the types of closures used to seal bottles — Sally Easton MW investigates exclusively for the Winelawcentre. -------------------------------------------------------------------------------------------------------------------------------
5th July 2007 Compensation for commercial agents — House of Lords decision released The long-awaited decision of the House of Lords in the case of Lonsdale v Howard & Hallam Limited was published on 4th July 2007. We are pleased to say that it brings much needed clarity and common sense to this hitherto highly uncertain area of UK law — click here for the full update. -------------------------------------------------------------------------------------------------------------------------------
5th June 2007 The UK's first 'virtual' wine merchant? From Vineyards Direct claims to be the UK 's first truly ‘virtual' wine merchant. Andrew Catchpole investigates. -------------------------------------------------------------------------------------------------------------------------------
23rd May 2007 Compensation for commercial agents — House of Lords finally consider the problem The appeal to the House of Lords in the case of Lonsdale v Howard & Hallam Limited was concluded on 17th May 2007. The appeal was brought against the Court of Appeal's rejection of the argument that the French approach of awarding a commercial agent two years' gross commission on termination should be followed in England. Unusually, the Winemakers' Federation of Australia was given permission to intervene in the case, in order to put arguments on behalf of its wine producer members. APP Law represented the WFA — click below for an exclusive "inside track" report on the hearing. -------------------------------------------------------------------------------------------------------------------------------
22nd March 2007 Agency or distribution — customer decides? One of the major UK supermarkets recently announced that, rather continuing to make individual payments each month to its many winery suppliers, it will from now on only accept invoices from their UK agents. Convenient for the supermarket, maybe, but it raises some pretty serious issues for both producers and agents. Compensation for commercial agents — Lonsdale The UK House of Lords will hear the appeal in the Lonsdale case on 16th/17th May 2007. Watch this space for news of a recent development that could have a significant effect on the outcome. -------------------------------------------------------------------------------------------------------------------------------
1st February 2007 Bulk shipping and UK bottling Shipping bulk wine into the UK is big business that's getting bigger — Sally Easton MW investigates, exclusively for the Winelawcentre: To what extent do legal constraints limit the expansion of UK bulk bottling? Click below for our survey of the legal framework: http://www.winelawcentre.com/private/uk-bottling/. -------------------------------------------------------------------------------------------------------------------------------
29th November 2006 Avoiding UK excise duty on wine — window of opportunity firmly closed It was widely suggested that the judgment of the ECJ in the Joustra case could have dramatic implications for wine retailing in the UK. Click here for our report and commentary on the decision. Use of oak chips in EU wines Since EC Regulation 1507/2006 came into force (see below) the French INAO has outlawed the use of oak chips in all "appellation controlee" wines. Similarly, the Italian Ministry of Agriculture has outlawed the use of oak chips in Italian "quality wines psr" (i.e. any DOC, DOCG or IGT wine sold as a product of a specified region). -------------------------------------------------------------------------------------------------------------------------------
18th October 2006 Use of oak chips in EU wines 19th October 2006 sees the entry into force of the EC Regulation 1507/2006,
detailing the basis on which oak chips may be used in wine-making. Annex
I sets out the oenoligical and labelling requirements. Annex II lists
the terms ("barrel fermented", "barrel aged", and similar)
which are designated as the only terms that may be used to describe a wine that
has been fermented, matured or aged in an oak container. None of those
terms may be used to describe a wine made with the aid of pieces of oak wood,
even in association with the use of oak containers. Click below for the full
text of the regulation: -------------------------------------------------------------------------------------------------------------------------------
20th September 2006 Post-termination restrictive covenants BCM Group v Visualmark Limited (High Court, 26th May 2006) provides some useful guidance on what will, and will not, be regarded as reasonable restrictive covenants in the context of agency contracts. The contract in question provided that for two years after termination the agent could not solicit business from any person who had been a customer of the principal during the twelve months preceding termination. When the principal ('P') tried to enforce it, the agent ('A') argued that it was unreasonably wide, and therefore unenforceable, because (a) it was too long, and (b) it was not limited to customers with whom A had had dealings. The Judge had no problem with the two year period, but he accepted A's second argument. In the absence of direct authority on the point in relation to agents (as opposed to employees), he looked to the Commercial Agents Regulations. They provide that a post-termination restrictive covenant in a commercial agency agreement may be valid if, inter alia, it relates to "the geographical area or the group of customers and the geographical area entrusted to A and to the kind of goods covered by his agency." For a detailed review of this subject see restrictive covenants. When champagne loses its fizz Very few wine trade disputes get as far as being decided by the court and having the decision published. A recent exception concerned some champagne that proved something of a disappointment. Not only did the case go all the way to the High Court, it then went on to the Court of Appeal — Friarwood Limited v Champagne Cattier SA. Compensation for commercial agents — an update The decision of the House of Lords in the case of Lonsdale v Howard & Hallam is still awaited (see items dated 29th June 2006 and 22nd February 2006 below). We understand that the next procedural milestone in the case is 11th October 2006, but that it is unlikely to be heard before the end of 2006. In the most recent reported case on this subject ( Vick v Vogle-Gapes Limited, High Court 30th June 2006) the Judge did not actually need to assess compensation. Apart from some helpful observations regarding the need for expert valuation evidence if the Court of Appeal's ruling in Lonsdale is to be followed, the decision does not take matters further. Our view as to the proper approach in agency compensation cases pending the outcome of Lonsdale remains as before — see assessment of compensation. -------------------------------------------------------------------------------------------------------------------------------
29th June 2006 Compensation for commercial agents On 27th June 2006 Mr Lonsdale, (of Lonsdale v Howard & Hallam fame, see item dated 22nd February 2006 below) was granted leave to appeal to the House of Lords. The Lords will, we hope, put right what is wrong with Court of Appeal decision and settle the vexed question of the proper approach to assessing compensation in these cases once and for all. See assessment of compensation for guidance on the legal position pending the outcome of this further appeal. -------------------------------------------------------------------------------------------------------------------------------
6th June 2006 Spoiled wine — who pays the bill? Spoiled wine — and especially cork taint — is a major problem for the wine industry. Andrew Catchpole finds out who foots the bill: To coincide with Andrew's article we have added a new section to the site which deals in some detail with the issues connected with liability for defective products: We have also reviewed and improved the coverage of regulatory matters, which now includes an updated and expanded set of links to sources of additional information and guidance: -------------------------------------------------------------------------------------------------------------------------------
14th March 2006 Time for a change? How and why do producers change agents, once they are in the UK market? Sally Easton MW talks to some producers and agents to discover some of the reasons. Click below to read Sally's report — exclusive to the Winelawcentre. -------------------------------------------------------------------------------------------------------------------------------
22nd February 2006 The English Court of Appeal has at last (in Lonsdale v Howard & Hallam Ltd, 8th February 2006) been given the opportunity to consider how the assessment of compensation for commercial agents should be approached. The decision is in some ways good news, but overall pretty bad news for principals. -------------------------------------------------------------------------------------------------------------------------------
13th December 2005 In theory the European Single Market should have resulted in freedom of trading and the leveling out of prices throughout Europe. Investigating exclusively for the Winelawcentre, Andrew Catchpole looks at the extent to which, in practice, "parallel trading" on other EU markets plays a part in the UK wine trade. Parallel trading in wine — how much of it goes on in the UK? -------------------------------------------------------------------------------------------------------------------------------
23rd November 2005 Compensation for UK commercial agents We have reviewed and updated the above material in the light of the most recent High Court case PJ Pipe & Valve Co Ltd v Audco India Ltd — see compensation cases. Although it is now nearly twelve years since UK commercial agents were given the entitlement to be compensated on termination of the agency, we are still no nearer having any clear guidelines that can be used to predict with any accuracy how much an agent is likely to be awarded. See compensation — still none the wiser, for a discussion of how we have got to this position and whether, given the present state of the law, the right to claim compensation is actually of much value to UK commercial agents in the wine trade. -------------------------------------------------------------------------------------------------------------------------------
12th October 2005 Finding a UK agent How should a wine producer go about finding the right agent to market his wines
effectively in the UK? We asked wine writer Sally Easton MW to
talk to UK agents to see what they think. Click below to read Sally's
report — exclusive to the Winelawcentre. -------------------------------------------------------------------------------------------------------------------------------
28th July 2005 Goodwill compensation — making sure an agent doesn't get compensation and take the customers with him If a UK agent or distributor is going to be entitled to goodwill compensation on termination of the relationship, on the basis that the producer will retain business which the agent/distributor has helped generate, what can the producer do to ensure that he will in fact retain that business, and that the agent/distributor can't take it away? We look at how to guard against that risk. See compensation — having the cake and the halfpenny. -------------------------------------------------------------------------------------------------------------------------------
5th May 2005 Compensation for UK commercial agents — where the agent has dealt with only one customer on the agency basis What if a producer has dealt with only one customer on an "ex-cellars" basis, and has paid his UK importer a commission on those sales? Does this make the importer a 'commercial agent'? In particular, will he have the right to goodwill indemnity or compensation upon termination of the agency contact? This question has been partly answered by an ECJ Advocate General's Opinion issued Thursday 28th April 2005. Click here for a summary of the Opinion. See also indemnity or compensation for guidance on what is likely to be in your best interests, depending which side you're on! -------------------------------------------------------------------------------------------------------------------------------
5th April 2005 Compensation on termination Will a wine producer have to pay compensation to his UK agent or distributor on termination of their agreement? Why is that, and how much will it be? Click here to access new and fully updated related material, including a completely new page on 'Choice of law', which reviews the state of play and looks at ways of minimising or maximising the potential liabilities. -------------------------------------------------------------------------------------------------------------------------------
2nd February 2005 We are delighted to announce a major update to the Winelawcentre. The site has a fresh new look and feel, plus many additional features and improvements in functionality/ease of use. Access to the detailed information and resources available on the site is still free of charge, but is now available only to registered users. Unless you are a really, really bad typist, registration only takes a few seconds. There is no downside whatsoever and you can register immediately by clicking here. The detailed content has been completely reviewed and updated. Lots of new material has been added and existing material expanded. See for example: Setting up distribution in the UK ------------------------------------------------------------------------------------------------------------------------------ For older items see the Bulletin archive Please do not hesitate to contact us if you have a specific query. |