Energy mis-selling claims

What is energy mis-selling?

Energy mis-selling commonly arises where:

• a broker or intermediary arranged an energy supply contract for a business;
• the broker received commission from he energy supplier in connection with that arrangement;
• the business was not given full and clear information about how that commission worked; and
• the cost of that commission was added to the unit price the business ultimately paid for its energy

In many cases, businesses were told only that “commission exists”, without being told important details such as how much commission was charged, how it was calculated, or how it affected the price of the contract.

The courts have now made clear that simply mentioning the existence of commission is not necessarily enough. In appropriate cases, a business is entitled to sufficient information to give fully informed consent to the commission arrangement.

Recent legal developments

The legal position in this area has developed significantly. Recent Supreme Court decisions have confirmed that, where a broker or intermediary owes fiduciary duties to a customer, commission arrangements must be fully and transparently disclosed in order for informed consent to be obtained. The courts have made clear that partial or vague disclosure may not be sufficient, and that businesses may still have viable claims even where they understood, in general terms, that a broker was being paid, but were not given clear information about the material features of how that commission operated.

These developments have strengthened the position of businesses bringing claims relating to undisclosed or inadequately explained commission in energy contracts.

Who may have a claim?

You may be able to bring an energy mis-selling claim if:

• your business entered into an energy supply contract through a broker or intermediary;
• the broker was paid commission by the supplier;
• you were not given clear information about how that commission worked, including its impact on price; and
• as a result, your business paid more for energy than it otherwise would have done.

Each case turns on its own facts. Not every commission arrangement is unlawful. We assess carefully what you were told at the time, what you understood, and how the contract was structured before advising whether a claim can be pursued.

How Hugh James can help

Hugh James is a leading UK law firm with extensive experience in complex financial and commercial disputes. We advise businesses of all sizes on energy mis-selling claims, supporting clients from an initial assessment of their position through to litigation where appropriate.

Our approach is careful and evidence-led, with a strong focus on commerciality and proportionality at every stage. We are transparent about prospects of success and risk, ensuring that clients are able to make informed decisions about how best to proceed.

In appropriate cases, we are able to act on a no win no fee basis, subject to an initial assessment of the merits of the claim and the suitability of funding arrangements.

What information will you need?

To assess your case, we will usually ask for:

• copies of energy contract(s);
• correspondence with brokers or suppliers about pricing or commission; and
• information about when you first became aware that commission may have affected the price you paid.

If documents are missing, we can advise on next steps.