A legal wrangle over the rights of a footwear agent could change the future of retail compensation, legal experts have said.
Lonsdale Agencies was originally awarded £5,000 after its contract to sell supplier Howard & Hallam's Elmdale footwear brand in the south-east of England was terminated after 13 years. Howard & Hallam ceased trading in 2003 after a dip in sales.
Lonsdale's lawyers argued that historically, an agent would be entitled to two years' worth of commission, based on the average earned in the past three years. But Lonsdale's appeal for a higher payout was rejected by the House of Lords, due to the agency's falling commission income prior to Howard & Hallam's demise.
Stephen Sidkin, fashion partner at law firm Fox Williams, said the decision would set a precedent. Previously, different levels of trade were not taken into account and a standard level of compensation would be paid, regardless of the agent's performance, he explained.
"This introduces a form of meritocracy, where claimants will not simply receive a flat rate of compensation," he added.