Post-Brexit: The Commercial Agents Regulations survive

On 13 February 2025, the government published the outcome of a consultation on the Commercial Agents (Council Directive) Regulations 1993 (“CARs”), which confirmed that the CARs will remain in force without amendment. 

The CARs – explained

The CARs came into force on 1 January 1994 and set out the terms of engagement between a business (the principal); and a self-employed intermediary that has authority to negotiate the sale or purchase of goods on behalf of the principal (the commercial agent). 

The CARs provide minimum rights for commercial agents in relation to any work they do for a principal. In particular, the CARs set out certain requirements that cannot be excluded by agreement, including requirements that: 

• commercial agents and their principals act in good faith, communicate necessary information, and comply with reasonable instructions from each other;
• where contracts are set up without a definite term (or are set up for a definite term but then are allowed to run on beyond the original term), a minimum notice period to terminate the contract applies; and
• commercial agents receive compensation for damages suffered as a result of termination of a contract by a principal.

In summary, the CARs provide protective rights for commercial agents which allow them to pursue principals who act contrary to those rights. 

The context 

The CARs are a product of the UK’s former membership of the EU. The UK government opposed the underlying directive when it was introduced, on the basis that its provisions sat at odds with the legal systems which operate in the UK.

The purpose of the government consultation, which ran from 16 May 2024 to 1 August 2024, was to review the operation of the CARs to ensure they met the needs of UK business following Brexit. The Conservative government in power at the time of the consultation, proposed to deregulate which, it was argued, would have resulted in greater flexibility for businesses. 

The decision 

The current government’s decision to maintain the CARs without amendment will be well received by commercial agents – who will continue to benefit from the protections they provide. 

Conversely, principals who had hoped that Brexit would have resulted in deregulation and greater freedom to enter into contracts with commercial agents, are likely to be disappointed by the government's decision. 

In any event, it is vitally important that both commercial agents and their principals are mindful of the CARs when entering into and ending contracts.