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  March 29th, 2021 | Written by

Process Agents and Why it Pays for Exporters to Stick to Processes

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  • Here are a few things to consider when appointing a process agent and how to read the small print.
  • Appointing a process agent is a lot like trying to choose an insurance provider.

Picture the scene. Everyone’s happy with the commercials. Several drafts of the contract have been reviewed. The goods are already being prepared to meet the client’s near-impossible deadlines. At the last minute, the client’s general counsel refuses to sign the contract because there’s no process agent. You scratch your head and google: “what’s a process agent?”. Don’t worry, you’re not alone.

In some transactions, the term can come up early on when signing a non-disclosure agreement. But for many exporters, the first time they hear the term is at the contract stage when dealing with a larger buyer. It is often the final hurdle before the contract can be signed. We look at what exporters need to know about process agents, also known as agents for service of process or resident agents. Even if you have heard of the term before, the team at Elemental CoSec shares a lesser-known provision that could save your firm thousands of dollars a year.

What is a process agent?

Let’s say a US firm, with no UK presence, is supplying goods to England. If the buying firm needed to make a legal claim in the future they would have to file papers in the US. Clearly, this is time-consuming and fraught with difficulties and would put many buyers off. Fortunately, there is a provision in the UK civil procedure rules that allows the US supplier to appoint a process agent upon whom court papers may be served (if the contract is under the laws of England and Wales). A clause would then be added to the contract stating who the process agent is and their address details. This doesn’t just apply to the UK and many international countries will rely on the English Court system.

How to appoint a process agent

Appointing a process agent is a lot like trying to choose an insurance provider. There are seemingly loads of options online, they all seem to offer the same thing and you only really find out how good they are when things go wrong. Here are a few things to consider when appointing a process agent and how to read the small print.

Responsive – It will be the role of the process agent to receive communication on your behalf and to forward this to you as soon as possible. Check to see how responsive they are to your initial inquiry. If it takes too long, it’s not a great sign.

Reliability – The process agent service needs to be in place for the duration of the contract. Look to see how long they have been trading for. Though it is possible to add a contract clause in the event they stop trading this would put the onus on you to check their status and appoint a new one if anything were to happen.

Requirements – find out exactly what information your contracting party requires from the process agent to satisfy their requirements. In some circumstances, they may even have a specific format for the appointment letter.

Changes – ensure you keep the details of the process agent to hand, we recommend appending these to the contract and notifying the personnel responsible for corporate secretarial duties internally. If your company address changes, you should notify the process agent.

Fees – Finally, as an infrequent and sometimes last-minute purchase, this is often where buyers can get caught out. Check to see if process agents charge extra for multiple appointments. It is also worth checking what happens upon renewal, including if there is a renewal discount.

Global appointments

If you have appointed a process agent in the past or for firms that enter multiple agreements, you could be missing out on a way to save thousands of dollars a year by using a global appointment. A global appointment is one process agent service to cover all your English law contracts, anywhere in the world. To find out more about global appointments or other frequently asked process agent questions visit Elemental CoSec’s UK process agent page.