All agents are equal, but bank and insurance agents are less equal than others

The Belgian law on pre-contractual information does not grant bank and insurance agents a right to pre-contractual information. The Belgian Constitutional Court feels this is not discriminatory.

A party to a ‘commercial cooperation agreement’ is entitled to a pre-contractual disclosure document, one month before signing the agreement. The Statute of 19 December 2005 defines a ‘commercial cooperation agreement’ as an agreement whereby one party grants another party a right to use a commercial formula (trade name, know-how or assistance) when distributing services or products in its own name and for its own account. The law therefore did not apply to commercial agents, since they acted on behalf of the principal.

Legislature has broadened the scope of this law as of 31 May 2014. The Statute of 19 December 2005 was incorporated in the Belgian Code of Economic Law as Book X.2. The prerequisite that the party receiving the right to the commercial formula must act in its own name and for its own account was deleted. Since 31 May 2014, commercial agents have been entitled to similar pre-contractual information as franchisees or independent distributors. Curiously enough, legislature expressly excluded bank and insurance agents from this right.

The Council of State therefore expressed concerns that this exclusion was discriminatory. In a decision of 15 October 2015, the Constitutional Court ruled that this exclusion is not discriminatory. The Constitutional Court advances three, not entirely convincing, arguments:

  • Bank and insurance agents fall within the scope of the Law of 13 April 1995 on commercial agents. Therefore they have no need for the protection provided by the law on pre-contractual information for commercial cooperation agreements.
  • The Law of 22 March 2006 regarding intermediation in banking and the distribution of financial instruments and the Law of 4 April 2014 regarding bank and insurance agents already provide for the training of the agents so that the relevant individuals sign the commercial cooperation agreement in full knowledge. These laws also ensure that the rights and obligations of these agents are clearly defined in their written agreements.
  • Given these specific regulations, any additional pre-contractual disclosure obligations are redundant and useless.

These arguments are not entirely convincing because a lot of pre-contractual information listed in Book X.2 Code of Economic Law is not required to be disclosed to bank and insurance agents based on the specific regulations for bank and insurance agents.

Bank and insurance agents are thus not entitled to similar pre-contractual information about their partner and the commercial cooperation agreement as their colleagues in other sectors.