Unite the Union v Liverpool Victoria Banking Services Ltd & Ors

Commission under an affinity agreement is payable only on revenue earned in respect of the services. This requires a causal connection between the agreed marketing or advice and the earning of the premium. The obligation is not limited to sales through designated telephone or website channels, but it does not extend to every sale to a union member.

Commercial or evidential difficulty in applying that causal test does not alter the contractual meaning. An estoppel by convention also requires a sufficiently established common assumption, reliance, and circumstances making it unjust or unconscionable to depart from it.

Unite, formed by the merger of the Transport and General Workers Union and Amicus, claimed commission from Liverpool Victoria Banking Services Ltd and related entities under two affinity agreements. The agreements concerned the marketing and sale of insurance and financial products to union members.

The parties disputed whether commission was payable on all sales of specified products to union members, or only on sales made through dedicated channels. Unite also sought to resist an estoppel case and challenged LV’s entitlement to recover advance commission payments. The court determined the proper construction of the agreements, the estoppel issue, the effect of Unite’s withdrawal of membership data, and the counterclaim.

1. Construction. The agreements required commission to be paid on premiums earned by LV “in respect of the Services”. The Services included selling specified products, but only where the sale followed advice or marketing to union members which LV was enabled to undertake through access provided under the affinity agreements.
2. The phrase required an effective causal connection between the Services and the earning of the premium. It did not require use of the designated telephone number or website. A member might be influenced by the union’s endorsement or other permitted marketing and then buy through a public channel. Conversely, a sale to a union member did not automatically attract commission.
3. The practical difficulty of identifying the relevant causal connection, particularly after LV expanded its general-market business, could not change the clear contractual meaning. The parties could assess the likely contribution of the affinity marketing.
4. Estoppel. Unite was not estopped by convention. Its conduct after 2009 fell short of establishing a common assumption on which it expected LV to rely. There was also no evidence that LV would have acted differently in reliance on any such assumption. It would not have been unconscionable or unjust for Unite to assert the true legal position. The court referred to Pearson v Lehman Brothers [2010] EWHC 2914 and [2011] EWCA Civ 1544 on the importance of reliance.
5. Unite’s cessation of membership-data provision was a breach of the agreements. LV was entitled to terminate. However, recovery of the £1.65 million advance payment could not be ordered until the commission earned had been determined or agreed. Any further commission due could be set off against LV’s liability under the Amicus guarantee.

First-instance decision. The judgment records no prior appellate decision.