Agent scores own goal

Published 10 October 2009

By Ed Foss & Giles Tagg, CMS Cameron McKenna

The Court of Appeal has recently considered the scope of an agent’s duty to its principal, in the context of a football agent acting for Trinidad & Tobago’s international goalkeeper, Kelvin Jack. The agent negotiated a contract between Mr Jack and Dundee United.

The agent also agreed a “secret deal” with Dundee United, unknown to Mr Jack, by which it was to receive a fee of £3,000 in return for obtaining his work permit. A dispute subsequently arose between the agent and Mr Jack. As Claimant, the agent claimed it had a continuing contractual entitlement to 10% of Mr Jack’s wages under the agency agreement. Mr Jack counterclaimed for the agency fees he had already paid to the agent, together with the £3,000 that the agent had received from Dundee United pursuant to the “secret deal”. The Court of Appeal held:

- if one undertakes to act for a man as his agent, that means acting 100% for him as though one were actually him;
- an undisclosed but realistic possibility of a conflict of interest was a breach of the agent’s duty of good faith to its principal;
- once a conflict of interest is shown, the agent forfeits its right to remuneration. The agent must also account for any profit made in breach of its fiduciary duty;
- an agent can avoid such a breach of duty and its consequences simply by making full disclosure to its principal;

The case reasserts the high standards that the law imposes on agents. For insurance brokers acting as agents of Insurers or, in certain circumstances, Insurers it is a useful reminder of the duties and responsibilities of an agent. As insurance brokers will be well aware, transparency between agent and principal is of paramount importance.

Clearly, there is something of a distinction between the operating practices of football agents (a relatively new breed), and those of insurance broking agents (who have been practising for centuries). Therefore, caution must be exercised in seeking to tease out analogies and lessons for insurance brokers from this case. Suffice to say that the overriding message, broadcast loud and clear by the Court of Appeal, is that agents of all types ought to be entirely open with their principals and make complete disclosure of all relevant material to them. An agent who is doubtful about his position ought to make disclosure of the very issues giving rise to his doubt, since the mere fact that he had doubt would generally be a message from his conscience.

For further reading, please see Imageview Management Ltd v Kelvin Jack [2009] EWCA Civ 63 This article first appeared on Law-Now, CMS Cameron McKenna's free online information service, and has been reproduced with their permission. For more information about Law-Now, please go to www.law-now.com