UK Trade Plating Portals Movex and Driive Me Face High Court Legal Challenge Over Alleged Breaches of Agency Law

Two major trade plating portals, Movex and Driive Me, are set to face a legal challenge in the UK’s High Courts over allegations they have breached UK agency laws and directives. These portals, widely used by car dealerships across the country for managing fleet and stock transfers, are accused of flouting laws governing agency relationships.

The controversy stems from claims that drivers and transport companies sign up as agents for the portals, which act as principals in arranging vehicle transfers. These drivers and companies are allegedly deployed according to specific guidelines set by the portals, earning commission fees upon completing assigned jobs. However, sources claim that Movex and Driive Me have overlooked key agency law obligations, including severance payments upon termination.

Under UK agency law, principals must follow specific regulations when working with agents. If an agent's services are no longer required, the principal is legally obligated to provide a severance payment, yet it appears these portals have allegedly avoided such payments.

Key aspects of UK agency law, which are central to this case, include:

• Agency Agreements: A clear agency agreement is crucial to avoid disputes and outline the rights and responsibilities of both parties. It should specify terms for commission, termination, and confidentiality.

• Commercial Agents Regulations: These regulations protect commercial agents differently than employees, ensuring a minimum notice period and the right to compensation or indemnity upon termination.

• Retained EU Law: The Commercial Agents Regulations, retained from EU law, continue to apply in the UK post-Brexit. Although UK courts are no longer bound by European Court of Justice decisions, these regulations remain legally binding.

The legal challenge underscores the complexities of agency law in the UK, which is often a source of contention in industries relying on agency-style contracts. This case could potentially impact the operations of trade plating platforms across the UK, depending on the High Court’s interpretation of agency law and the obligations of principals in such arrangements.

Agency law is part of commercial law and regulates the relationship between a person, known as the principal and another person called the agent, who acts on their behalf in negotiating and concluding commercial and legally binding relations with third parties. Examples include directors acting on behalf of their companies and travel agents taking bookings on behalf of a holiday company.

It's understood Car Delivery Portals come under the same category according to speachalist according to legal experts preparing to take the Companies Movex & Driive Me to task.

According to legal specialists preparing to take action against car delivery portals Movex and Driive Me, these companies fall under the category of "principal" in agency law. Paul Mohamed, speaking to Global247news while attending court in Switzerland, confirmed that these driving portals act as principals, with drivers serving as their agents. However, Mohamed claims that the portals fail to provide severance pay upon termination, a violation under agency law unless gross negligence is involved.

“Driving portals are the principal, and the drivers are agents acting on their behalf," Mohamed explained. "Yet, when it comes to termination, drivers are not receiving severance for their loss of earnings, as mandated under agency law.”

Mohamed disclosed that his team has studied two cases in detail and is preparing legal protocols to bring to the High Court. One case involves Movex, which terminated two agents without notice, citing "conflict of interest" despite the lack of an exclusivity agreement. “This is a prima facie case,” said Mohamed, adding that the agents were not informed of the termination until they sought clarification after losing portal access. "They are entitled to a severance payment for future losses and remuneration based on their two years of service as agents."

The calculation of severance, he explained, considers both the duration of service and projected future losses. Mohamed also suggested that the case may involve monopolistic practices, which he is currently discussing with the Department of Trade and Industry (DTI).

The case against Driive Me presents similar issues, though it did involve notice of termination. Mohamed emphasized that commercial agents, including drivers, act with the authority of their principal to carry out stock moves but typically do not bear contractual liability or control over the principal’s goods. Instead, they are compensated through commission fees.

“Car portals seem to have either overlooked or ignored these agency regulations, especially regarding termination,” Mohamed stated. “Under these rules, terminated drivers or transport companies are entitled to claim severance.”

This legal challenge may signal a turning point in the treatment of drivers and transport companies working with vehicle delivery portals, potentially leading to significant regulatory scrutiny of these platforms.

If you have been in the same position, Paul Mohamed urges former agents to make contact and offers no win, no fee.

Both Movex and Driive Me have declined to comment.