Multiple brokers and the right to commission: Court of Appeal ruling 2878/2018


Multiple brokers and the right to commission: Court of Appeal ruling 2878/2018

Great Estate Network , Laws&Regulations Sep 24, 2021 No Comments
“On the subject of mediation, when the deal has been concluded with the intervention of several mediators (whether joint or separate, contemporaneous or successive, agreed or autonomous, on the basis of the same assignment or several assignments) pursuant to Article 1758 of the Civil Code, each of them is entitled to a share of commission to be determined on the basis of the criterion of equity pursuant to Article 1755. of the Civil Code.”

In this article, we will examine what the Court of Appeal of Rome (Corte D’Appello di Roma) has ruled on the issue of plurality of mediators and the right to commission.

The case before the Court concerned a sale of real estate for which the purchaser had used the services of two brokers.
In particular:

  • the buyer had initially entered into negotiations for the purchase of the property with a first broker, through whom it had viewed the property several times;
  • Then, again using the first broker, the purchasing party made a purchase offer, which was not accepted by the seller;
  • Subsequently, it had turned to a second broker for the purchase of the same property with whom it had first made a second offer to purchase – for a price slightly different from that offered with the first – then accepted by the seller, and then concluded the contract of sale of the property brokered;
  • in light of these facts, the first mediator had asked the Civil Court of Rome (Tribunale civile di Roma) to order the purchaser to pay the sum of €18,400.00 plus statutory interest as commission pursuant to Article 1755 of the Civil Code, which, by decree, had ordered the purchaser to pay said sum, together with the costs of the enforcement proceedings settled by the same decree
  • With a summons duly served, the purchaser brought an objection against the said decree, claiming lack of passive legitimacy, the non-existence of the mediator’s right to payment of the commission and requesting the revocation of the opposed decree. The first mediator appeared, rejecting the objections and insisting on the legitimacy of the request, as well as on the mediation activity regularly carried out in favour of the opponents, and asking for confirmation of the opposed injunction;
  • the Court rejected the opposition and – having ascertained the minor credit of the opposing party – revoked the injunction, sentencing the purchasing party to pay the first mediator the sum of €4,900.00 plus legal charges, and offset the costs of the proceedings between the parties.

The Court of Appeal is therefore called upon to resolve this question:

IS THE FIRST MEDIATOR ENTITLED TO PAYMENT OF COMMISSION BY THE BUYER, AND TO WHAT EXTENT?

Judgment 2878/2018 of the Court of Appeal of Rome retraces the jurisprudence of the Court of Cassation which has led to the formulation of the principle, in relation to mediation, that in the event that the deal is concluded through the intervention of several mediators, the right to commission arises for each mediator where the contribution of each of them is causal to the subsequent realisation of the deal.

Confirming the judgment of the Court of First Instance of Rome, the Court of Appeal upheld the first broker’s right to payment of the commission, notwithstanding the subsequent intervention of a second broker, with whom the contract for the sale of the mediated property was subsequently entered into.

Indeed, the Supreme Court’s judgment No. 869/2018 emphasises that the intervention of a second mediator does not break the causal link between the activity of the first mediator and the conclusion of the deal.

Thus, it is not necessary for the entitlement to a commission to be established that a transaction is actually concluded, but it is sufficient to play a decisive and causal role in it.

Thus: it is necessary for the mediator to relate the will of the parties, albeit in a complex and time-consuming process, and for that relationship to be the indispensable antecedent to the conclusion of the contract, in accordance with the principles of adequate causation.

… The Court notes that the principle that, firstly, for the payment of remuneration to the mediator is not necessary that thanks to his activity is reached the concrete conclusion of the deal, but that he is still entitled if he had a decisive role and causal: “in terms of mediation, the right to commission arises whenever the conclusion of the deal is in causal relationship with the intermediary activity, without requiring a direct and exclusive etiological link between the activity of the mediator and the conclusion of the deal, being sufficient, that the mediator – even in the absence of his intervention in all stages of negotiation and even in the presence of a process of formation of the will of the parties complex and articulated in time – has put them in relation, so as to achieve the antecedent necessary to reach the conclusion of the contract, according to the principles of adequate causality. ” (Cass. no. 25851/14).

In the present case, the purchasers, the present appellants, had begun negotiations for the sale of a property through a first broker, the present appellant, and, having made an initial offer to purchase it to no avail, had subsequently approached a second broker with whom they concluded the deal.

The Court of Appeal found that the first mediator’s causal contribution took the form of initiating contacts between the parties, including an initial viewing of the property by the prospective purchasers, and that it was most concrete in the formulation of a purchase offer, although not accepted by the seller.

The fact that the second proposal made by the purchasers, and then accepted by the vendor, was in return for a price slightly different from the first, is not a factor which excludes the causal link between the two mediation activities, since a single element of differentiation is not sufficient to break that link.

… In the opinion of the Court, therefore, does not assume relevance – from the point of view of the impact on the causal efficiency of the exclusive or concurrent work of that mediator – the absolute identity of the conditions under which the negotiations were completed only later, and with the intervention of another mediator, not being a single element of partial differentiation, alone, capable of breaking the causal link between the activity originally carried out by the person who first put the parties in touch with each other and the deal between them concluded.

On the other hand, as regards the quantum of the first mediator’s commission, the Court refers generically to the principle of equity laid down in Article 1755 of the Civil Code, according to which the commission is calculated on the amount paid to the second mediator, i.e. the person who brought the transaction to a conclusion.

In the absence of criteria for determining the mediation fee, be it the indication of a fixed price or fees for determining it, the Court applies the criterion of determining the amount as 50% of the fee paid to the second mediator.

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Marianna Gaiotto

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