In modern trade practice freight forwarders, as is well known, often assume by the express or implied terms of their contract with their customer a duty, or at least an option exercisable by an election, to perform the main aspect of the relevant contracted services as principal obligor to the customer (so that any performing third parties sub-contractors are without any direct contractual relationship with the customer); whilst perhaps nevertheless in other more limited aspects of the agreed services still acting for the customer in part at least as mere agents to arrange so as in such cases to put the customer in some direct contractual relationship with the third party. In yet other cases the forwarder may be a traditional ‘forwarding agent’ acting throughout entirely as a nothing more than agent to arrange.
Where the forwarder is, at least in some relevant aspect of his work, no more than an agent to arrange in the above sense in the ordinary way his duties as agent include; a) his common law duty not to act or continue to act or his principal in situations of at least actual conflict of interest such that he cannot act in the best interest of one principal without damaging the interest of another principal and, b) his associated common law fiduciary duty nor to receive or agree to receive any secret commission or other reward or inducement (in effect and certainly in law a form of bribe) from a third party.
The fiduciary duty of the agent is engaged where a forwarder acting as agent obtains his remuneration or like other reward for his services from a third party (whether or not truly capable of being described as another principal) in which case difficult questions of mixed fact and law are often raised as to whether the terms of the contract exclude or modify any duty that would otherwise arise on his part as a matter of the general law or in any event whether any duty so assumed was in fact complied with.
This recent decision of the Court of Appeal concerned a claim for substantial damages by an financial derivatives broker (the appellant to the appeal) against its customer arising out of certain alleged breaches on the part of the customer of their brokerage agreement. The Defendant customer raised various defences to the claim; including, as relevant here on appeal, a defence that the Claimant’s breach of its fiduciary duty arising out of the brokerage agreement by agreeing to receive a secret commission was such as to deprive it of any right to substantial damages for any proven breach on the part of the Defendant of the same agreement.
The Court of Appeal in short agreed with the trial judge that the claimant was an agent of sorts in some respects at least with relevant fiduciary duties but, in reversing the trial judge, held that on the facts there was no breach at all by it of any fiduciary duty.
Though the case did not of course concern freight forwarders it raises important questions of general application to all agents.
In its judgment the Court emphasised that any contractual derived fiduciary duty is subject, as with any other contractual duty, to exclusion or modification by; a) an express term of the contract, b) an implied term including a relevant trade custom or, c) some other subsequent non-contractually derived informed consent of the principal given in the course of performance of the contract to departure from the duty – as where receipt of the actual or proposed commission is consented to by the customer following disclosure to him of the position.
The authorities show that reliance purely without more on an asserted trade practice (as opposed to an express term or some other informed assent following disclosure of the position) may be fraught with difficulty as illustrated by the facts in McWilliam v Norton Finance (UK) Ltd  1 All ER Comm where the Court of Appeal held that the authorities recognising that practice of insurance brokers properly retaining commissions from third parties turned on a customary usage or practice which did not apply to payment protection insurance sold to consumers. In this respect BIFA 2017 condition clause 9 (‘The Company shall be entitled to retain and be paid all brokerages, commissions, allowances and other remunerations customarily retained by or paid to Freight Forwarders’) should be treated with care as the precise scope of any relevant custom or like still needs to be set up and proved for the clause to apply on the facts of any particular case.
The cases also show that where there is no advance contractual assent, whether through an express term or trade usage, the disclosure required (and hence the principal’s knowledge and informed assent) may be required to be more specific or special; especially if the principal is a consumer and even more so if of the vulnerable and unsophisticated type.
Ultimately as Lord Wilberforce observed in New Zealand Netherlands Society ‘Oranje’ Inc v Kuys  1 WLR 1126 at 1130 the precise scope of the fiduciary duty (and indeed also what is required to be done to discharge it) must be moulded according to the nature of the relationship as proved by the individual facts of a case.
However on the other hand it has been held (see in particular Hurstanger Ltd v Wilson  1 WLR 2351 as cited at length in this case) that where the principal knows, as in the present case, that the agent was being paid commission by another he cannot object on the ground that he did not know the precise particulars of the amount so paid. It is said that the principal can always make enquiry of the principal in this respect and if he does not like the answer, take his business elsewhere. Here, and this was the crux of the Court Appeal decision, any omission on the part of the agent (the Claimant appellant) was only one to disclose the amount of commission it was to receive from the third party and nothing more as the principal well knew that the agent was to receive some commission from a third party.
These finding made otiose the third question raised on the appeal as to whether a breach on the part of the Claimant appellants of a fiduciary duty arising on its part under the brokerage agreement was such as to deprive it of its own right to damages for the proven breach on the part of the Defendant of its counterpart obligations under the same brokerage agreement. Nevertheless the Court of Appeal proceeded to consider the point in broad terms without expressing any concluded views.
The Court of Appeal observed that this question should no doubt be considered in the light of the Supreme Court’s decision in Patel v Mirza  AC 467) which required a proportionate and just public policy answer to any proven illegality appropriate to the particular facts and justice of each individual case rather than a ‘blanket’ or ‘catch-all’ general answer.
This is no doubt so but it is to be noted that the present case did not concern a claim by the agent for recovery from the principal of his agreed commission but rather one for damages for breach of a discrete further obligation assumed by the principal and to what extent the old authorities (depriving an agent of his right to remuneration in all but very inconsequential cases of breach of his fiduciary duty) are still good law in the light of Patel is an interesting point which remains to be answered.