LG Köln: Outgoing commercial agent entitled to full portfolio management commission
http://www.grprainer.com/en/legal-advice/commercial-law/commercial-agency-law.html Even an outgoing commercial agent is entitled to the full portfolio management commission. That was the decision of the Landgericht Köln (Regional Court of Cologne) in its ruling of June 30, 2015, Az.: 4 O 355/14 (not yet final).
GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London – www.grprainer.com/en conclude: The Landgericht Köln has strengthened the position of commercial agents, e.g. insurance agents, ruling that they are entitled to the full portfolio management commission even after the commercial agency (http://www.grprainer.com/en/legal-advice/commercial-law/commercial-agency-law.html) agreement has been terminated.
In the present case, the commercial agency agreement came to an end on March 31, 2014, prior to which the plaintiff had worked for eleven years as a commercial agent and agency director for the defendant. The latter had only paid out part of the commission for portfolio management to him. The plaintiff took the view that he was due the portfolio management commission in full pursuant to secs. 87 and 87a HGB (Handelsgesetzbuch – German Commercial Code).
It had been contractually agreed that the claim to the portfolio commission would arise following payment of the full annual amount or the corresponding instalments. The Landgericht did not consider the fact that the agreement was terminated before the end of the year to be an obstacle to this, stating that this did not lead to the claim to portfolio management commission having to be reduced on a pro rata basis. A commercial agent renders his services based on clients not terminating existing agreements and paying the premium. In return, he receives portfolio management commission. Continuing to maintain client contacts may then only be in pursuit of another purpose, e.g. the continuation of contracts in the years to come, but this no longer has any bearing on the contractual term and premium which have already been commenced and paid respectively. The Court went on to say that a temporal link to the agent“s services could therefore only apply to the period of time up until the extension of the agreement and payment of the premium, otherwise the portfolio management commission would become a kind of loyalty premium. For this reason, the agent bringing the legal action had a right to be paid the full portfolio management commission.
Commercial agents are entitled to commission for the business transactions that they conclude on behalf of another company. The right to be paid commission arises once a business transaction has been concluded, e.g. taking out an insurance policy. This entitlement continues to exist even if the company cannot deliver. Since it is often the case that the company benefits from these business transactions over a longer period of time, it is also possible for claims for compensation to arise in favour of the commercial agent.
It is especially with regard to the payment of commission or claims for compensation that legal disputes can emerge following the termination of a commercial agency agreement. That is why lawyers who are versed in the field of commercial agency law ought to be consulted, if possible, as early as the stage at which an agreement is being concluded.
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