For many businesses, growth depends on representation. Agents, distributors, sales partners, and commercial intermediaries (including brokers) are often asked to promote, negotiate or sell on behalf of multiple principals at the same time. This can be commercially sensible and, in many sectors, unavoidable. But it brings with it a key risk: conflicts of interest.
At its core, the law expects an agent to act with loyalty. That does not mean blind exclusivity, but it does mean the agent must not allow its own interests, or the interests of another principal, to undermine the position of the principal it is serving. Where conflicts arise, the consequences can be serious: termination of the relationship, loss of revenue, and exposure to damages claims. Moreover if the terminated agent is a commercial agent under the Commercial Agents Regulations then the termination of an agency agreement as a result of a conflict of interest can be expected to exclude the terminated agent’s ability to claim either compensation or indemnity under the Regulations.
The principal’s perspective: clarity, confidence and control
From the principal’s point of view, the concern is straightforward. If an agent represents competing brands or products, how can the principal be confident it is receiving proper focus and commercial priority?
Competition does not need to be obvious to create tension. Products may not sit on the same shelf or compete on price, yet still target the same customers, address overlapping needs, or rely on the same distribution channels. In those situations, the agent may be forced to make choices: which product to promote, which opportunity to prioritise, or how to shape a pitch to fit a customer’s criteria. Each of those choices can disadvantage one principal in favour of another.
Principals often assume that disclosure is implicit: “We knew they acted for others in the sector.” But awareness is not the same as agreement. English law has repeatedly emphasised that consent must be informed. That means that the principal must understand not just that other relationships exist, but how those relationships could affect decision-making in practice.
This point was underlined in one case a few years ago. Although the case did not involve competing products in the strict sense, the Court examined whether a principal had genuinely agreed to an arrangement that placed the agent in a position of conflicting incentives. The Court’s analysis made clear that silence or general knowledge is not enough. Consent requires sufficient information to make a real choice. For principals, the lesson is that assumptions are risky. If the relationship matters, clarity should be documented, revisited and, where appropriate, renegotiated.
The agent’s perspective: growth without hidden exposure
For agents, the challenge is different. Commercial reality often requires a diversified portfolio. Representing only one principal may be economically unviable, particularly in niche or cyclical markets. However, diversification increases exposure to conflict risk, especially as product lines evolve and markets shift.
Conflicts are not limited to situations where two principals sell directly competing products. They can arise where customer requirements are broad, where bundling is expected, or where contractual commitments limit how the agent can promote alternatives. Even if the agent believes it is acting fairly, the law focuses on structural risk, not just intention.
A common mistake made by agents is to treat disclosure as a one-off exercise. In practice, informed consent is not static. It may need to be refreshed when a new principal is taken on, when an existing principal launches a new product, or when market conditions change in a way that creates new overlap. Failing to revisit consent can leave an agent exposed even where the original relationship began on transparent terms.
Expert Tooling and Automation Ltd v Engie Power Ltd
In Expert Tooling and Automation Ltd v Engie Power Ltd the Court of Appeal considered an appeal arising from energy supply arrangements entered into by Expert Tooling and Automation Ltd, a manufacturing business, following negotiations conducted by Utilitywise Plc.
Utilitywise had been engaged by Expert Tooling to source and negotiate electricity supply contracts. Under those arrangements, Utilitywise received commission payments from the supplier, Engie Power Ltd, rather than charging Expert Tooling directly.
The central issue before the Court of Appeal was whether Utilitywise had breached fiduciary duties owed to Expert Tooling by failing to obtain its fully informed consent to the commission arrangements, and whether Engie could be liable for procuring or assisting any such breach.
The Court of Appeal decided that Utilitywise was acting as an agent and therefore owed fiduciary duties to Expert Tooling. Although Expert Tooling was aware that Utilitywise would receive commission from the supplier, the Court found that critical information had not been disclosed. In particular, Expert Tooling was not told the amount of the commission, how it was calculated, or that it was embedded in the unit price of electricity. As a result, Expert Tooling’s consent was not fully informed. The Court emphasised that informed consent requires disclosure of all material facts and cannot be satisfied by partial or general awareness.
Put another way – it is not enough to put a principal in a position where they could have asked questions. The burden lies on the agent to ensure the principal understands what is being agreed to.
For agents, the takeaway is practical rather than theoretical. If a relationship or incentive could reasonably affect how the agent performs its role, the relationship should be disclosed in a way that is clear, specific, and commercially intelligible.
Where relationships fail: what goes wrong most often
Problems tend to arise not from bad faith, but from drift. An agency begins with compatible products and aligned interests. Over time, portfolios expand, strategies change and customer demands evolve. What was once acceptable dual representation quietly becomes problematic. By the time tensions surface, trust has already eroded.
When disputes reach the courts, arguments that “everyone knew how the market worked” or “this is standard industry practice” rarely succeed. Courts look at what was actually explained, when, and with what level of detail. They are sceptical of implied consent where the commercial implications were not clearly set out.
Practical steps for principal and agents
For principals:
- Ask direct questions about competing relationships, not just at the start but periodically.
- Require disclosure that explains practical impact, not just identity of other principals.
- Consider consent as being conditional and reviewable, not permanent.
For agents:
- Map potential conflicts realistically, including indirect or future overlap.
- Document consent in plain commercial language.
- Revisit consent when circumstances change, even if it feels awkward.
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