BL-2020-001417 - [2025] EWHC 2487 (Ch)

The Court can properly quantify the objective value of the services on a commission basis where this is industry practice and/or reflects the parties’ own understanding of the value of the claimant’s services: Goff & Jones at paragraph 5-50.

In Vedatech Corp v Crystal Decisions (UK) Ltd [2002] EWHC 818 (Ch) the parties envisaged that the claimant, who provided services by introducing the defendants’ software product into Japan, would receive some sort of participation in the sales thereof. Jacob J (as he then was) held that the claimant was entitled to a commission and ordered an inquiry as to the quantum of that claim. In particular, he held:

“[86] … Clearly the parties expected that some of the benefit of the work lay in the future rather than in the early part of the entry into the Japanese market. …

[90] Accordingly I hold that Vedatech are entitled to claim reasonable remuneration for the work that was done for Holistic. In principle, because Vedatech were asked to and did undertake risk as to success of Holos (and not merely risk as to whether there would be a contract) they are entitled to some reward if that risk proved beneficial. As in Way v Latilla the proper remuneration due is to be assessed not merely on a time basis but on time and success basis.”

In Fenchurch Advisory Partners LLP v AA Ltd [2023] EWHC 108 (Comm) the claimant was a banking and finance advisory firm which provided advice to the defendant in relation to a potential sale of its insurance division. In relation to quantum, Sean O’Sullivan KC (sitting as a Deputy High Cout Judge) found that the market value of the claimant’s services was to be assessed on a commission basis on the footing that both the parties’ understandings and the expert evidence showed that this was the way in which advisers like the claimant charge for their services in a transaction of this kind; see paragraphs 319, 343 and 358. In particular, at paragraph 343 the Deputy Judge found that there was no evidence to support a market value calculated on the basis of hourly rates.

There is evidence from the experts that payments by reference to percentages or commissions were the usual way of payment in the industry such that payment would not be by reference to time spent. It is implicit in this that payment would be based on results, such that no money would be payable if there were no investors. The rate of remuneration would reflect the risk being undertaken that there might be no returns. In this way, regard should be had not only to the work undertaken in respect of The Observatory/2B and LGT/Crown, but also to the risk that other work undertaken to bring other investors to Octave/Astra may not reap any direct reward. It is in the nature of such work that a large amount of the sales work will not result in an end-result.

In my judgment, that is how Matrix was to be paid by Musst. That is supported by (a) the reasoning of the experts, (b) the absence of evidence that time records were kept, (c) the commission compensating in part for the risk of no money being due at all due to the contingencies not being fulfilled, and (d) some limited evidence of some commission being expected. All of this supports the case that the value of the services should be on the basis of a percentage rather than an hourly basis, as indeed was the case for Musst’s actual agreement with Octave. Another part of the reason the parties operated on a commission basis is that both Octave/Astra and Musst were start-ups who could simply not afford to commit to an upfront capital outlay on distribution services; they were only ever going to operate, or be able to operate, on the basis that distribution would be paid for it if was successful and investors were found.

The payment being on the basis of results and not by reference to the services provided has an effect on limitation to which this judgment will now turn.