How does Brexit affect the commercial sales agents regulations?

While Covid-19 dominates the headlines at the moment, none of us have forgotten that the UK left the European Union on 31 January 2020. Since then, here hasn’t really been much of a change because we are now in a transition period while the UK and the EU try to agree a trade deal to cover their future relationship. During this transition period EU law continues to apply in the UK in pretty much the same way as it always has.

However, the transition period is due to end on 31 December 2020 and, one way or another, things will change on that date. Over the course of the UK’s membership of the EU, a significant body of law originating from the EU has been developed. This includes the Commercial Agents (Council Directive) Regulations 1993 (“the Regulations”), which impact on many sales agency contracts. Many of our clients, both principals and commercial sales agents, have been keen to understand what will happen to the Regulations after 31 December 2020 – will they still apply? The short answer is that they will.

A lot of attention has, quite rightly, been focussed on whether or not a trade deal can be reached and the effect that either outcome will have on businesses in the UK. At this point in time, it is difficult to see which way things will go. If a trade deal is agreed, this is likely to result in the ongoing effectiveness of the Regulations, particularly if agreement is reached on regulatory matters and / or the so called “level playing field” (ie that businesses in the UK and the EU are subject to a set of common rules or standards).

However, even if no trade deal is reached the Regulations would continue to have effect after 31 December 2020. The reason for this is the European Union (Withdrawal) Act 2018, which specifies that any EU derived law that is in effect before ‘exit day’ (ie 31 December 2020) will continue to have effect after exit day. That would include the Regulations.

The Regulations could be amended or repealed in the future, but only Parliament could do this. Frankly, it looks like Parliament is going to have its hands full after 31 December 2020 and it seems highly likely that the Regulations would be fairly low on the list of priorities. We can therefore fairly safely assume that the Regulations will remain in place for the foreseeable future.

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Kevin Manship, Legal Director
Blake Morgan Solicitors LLP, One Central Square, Cardiff, CF10 1FS
Email: kevin.manship@blakemorgan.co.uk

Direct Tel: 029 2068 6126
www.blakemorgan.co.uk

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