KEEP UP TO DATE WITH ALL THE IMPORTANT COVID-19 INFORMATIONCOVID-19 RESOURCE PORTAL

FANews
FANews
RELATED CATEGORIES
Category Legal Affairs
SUB CATEGORIES General | 

Tacit agreement on intermediary commission

03 December 2020 Patrick Bracher, Norton Rose Fulbright
Patrick Bracher, Norton Rose Fulbright

Patrick Bracher, Norton Rose Fulbright

Despite there being no explicit agreement on the amount of an intermediary’s commission, the client’s consent to payment of the commission may arise from the circumstances rather than an express agreement

A recent English case (on solicitors’ fees but pertinent here) points out that informed consent to pay commission may arise when the client knows that the agent will receive commission and could have discovered the commission, but did not take the trouble to enquire. A misapprehension as to the amount of the commission will not mean that there has been no informed consent. Where the agent can show a customary usage or that the amount of commission is standard and ascertainable on enquiry, the failure of the client to make enquiries as to the amount of the commission is fatal to a contention that there has been insufficient disclosure of the amount to be earned. This includes commission earnings which are easily ascertainable from the available sources.

It also applies, as in the case of insurance intermediary commission, where the client leaves the agent to look to another party for remuneration (the insurer) or knows that the agent will receive something from the other party. The client cannot object on the ground that they did not know the precise particulars of the amount paid. As was pointed out, the client can always ask and if they do not like the answer they can take their business elsewhere.

The case is Belsner v Cam Legal Services Limited [2020].

 

First published by: Financial Institutions Legal Snapshot

Quick Polls

QUESTION

ASISA’s lobbying of the SARB to suspend Circular 15, which contained significant changes to foreign exchange controls. What is your take on this accusation?

ANSWER

[a] ASISA was right to seek clarity on Circular 15
[b] Large asset managers are conflicted & will suffer financially if Circular 15 stands
[c] Savers get enough exposure to offshore assets under existing Reg 28
[d] Who cares?
fanews magazine
FAnews November 2020 Get the latest issue of FAnews

This month's headlines

Customer experience in the ‘now’ generation
Is our industry a tainted industry?
How to keep brokers out of the firing line
Getting to grips with contractual versus delictual liability
International trusts and tax consequences
The COVID-19 pandemic and medical schemes
Subscribe now