Insurers win dispute with union over commission payments

An insurance company has won a legal dispute with a trade union over commission payments on the sale of its services to new customers.

The case involved Unite the Union and Liverpool Victoria Banking Services.

They had an agreement whereby Unite allowed Victoria access to its members in order to market and sell services to them. In return, Victoria would pay Unite a commission on the sales it made to those union members.

The dispute arose when Victoria began its own marketing campaign to the general public. It gained several new customers, including some members of Unite who had not previously bought its services.

Unite claimed it was entitled to commission on these customers, even though they had not been gained through the in-house marketing system as laid out in the agreement.

Victoria refused to pay, arguing that the new customers had come through its own marketing campaign, which was totally independent of the in-house agreement with Unite. The fact that some of the new customers were members of the Unite union was just a coincidence.

Unite took action but the court ruled in favour of Victoria. Under the agreement, Victoria was allowed to market and sell its services to the members of Unite, and paid a commission on the new customers it gained through that channel.

The Unite members that came through Victoria’s general marketing campaign did not apply under this agreement and so no commission was due.

Please contact us in our Warminster office on 01985 214444, or Westbury on 01373 865577  if you would like more information about financial disputes or any other aspect of contract law.