DaimlerChrysler UK is facing compensation claims running into millions of pounds from its Mercedes-Benz dealers who are facing contract termination at the end of this year.

The company has invited its dealers to submit individual claims pending the High Court hearing in July to determine whether its decision to issue 12-month termination notices in December was legal.

Dealers have until June 8th to submit a compensation claim, a date set at the initial court hearing on April 30. A meeting of the Mercedes-Benz Dealers Campaign, which is challenging DCUK's decision, on Friday at the National Motorcycle Museum, in Birmingham, was called to press home the importance of meeting the deadline.

Campaign spokesman Nick Adams said: “It's a remarkable situation to see DCUK inviting its dealers to sue them, but it must have been expecting it to happen.

“If a dealer bought a site in the last few years and DCUK made it clear that it was prepared to make an ongoing commitment to the dealer and that a return on investment would come after five years, its decision to terminate a contract in 12 months can be seen as misrepresentation by DCUK.”

DCUK had invited compensation claims at the April 30 hearing. Dealers can claim for all expenditure from investment in property to workshop tools. Mr Adams said he was aware of some dealers who were preparing claims of £3m-4m and that it was expected that the majority of the MB-UK network would sue.

Mr Adams said the campaigning dealers case against DCUK was a “done deal”. “We have unity and simplicity on our side. The network is united in what is a simple case of termination notices issued illegally,” he said.