UK: England and Wales: agency - acting for competing principals

The Court of Appeal gave judgment last Friday in Rossetti Marketing Ltd & Anor v Diamond Sofa Company Ltd [2012] EWCA Civ 1021. The case contains, amongst other things, some interesting discussion regarding the circumstances in which an agent may act for competing principals (at paras. [22], [23] and [27], per Lord Neuberger MR):

An agent can act for two principals with conflicting interests in two types of case. The first is, as already indicated, where both principals agree. In such a case, it is for the agent to show that the principal not merely consented, but that the consent was given on a fully informed basis – i.e. that the agent had made full disclosure to the principal – see per Tuckey LJ in Hurstanger Ltd v Wilson [2007] EWCA Civ 299, [2007] 1 WLR 2351, para 35 ... The second type of case where an agent can act for competing principals is where, as in Kelly [1993] AC 205, the principal must have appreciated that the nature of the agent's business (in that case a residential estate agent) is 'to act for numerous principals'. More generally, I agree ... that, particularly as 'estate agents are only imperfectly agents and are known to act for many principals', it is highly questionable whether the reasoning in Kelly [1993] AC 205 should be extended to other cases of agency, at least in the absence of clear evidence to support such an extension".