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Frequently Asked Questions

Answering your questions
about the Business Energy Claim

What is the claim about?

These claims are about the recovery of ‘secret commissions’ or, to give them their proper legal name, bribes.

It is common practice for energy suppliers to pay energy brokers a commission for every energy contract the broker arranges on behalf of its clients. In many cases, the end customer would not be told about the commission but would absorb its cost by paying higher energy rates. In most cases, these payments will be unlawful, and will amount to bribes paid by the supplier; as a result the customer is entitled to the repayment of the bribe, plus interest and damages.

What has OFGEM said about Third Party Introducers?

Ofgem has long held concerns about a lack of transparency in the energy market. In a ‘micro business review’ conducted recently, Ofgem noted that the market was one in which “pricing is still far from fully transparent and where companies hold significantly more key information than the customers they serve.”

In a later consultation, Ofgem found that the lack of transparency in broker commissions was a significant issue: “Microbusinesses are uncertain or entirely unaware of the typical commercial arrangements between brokers and suppliers, the impact [those arrangements] may have on the offers presented to microbusinesses, and the true costs of agreeing a supply contract when using a brokerage service. Lack of knowledge about broker commission appears to be a particularly significant issue. The lack of transparency around broker commission charges means that many microbusinesses don’t realise how much of what they pay via their energy bill goes to their chosen broker.” In other words, commissions are not properly disclosed and as a result microbusinesses are prevented from accessing the best deals.

The conclusions reached as to the practices of brokers and the lack of transparency are not only applicable to microbusinesses but to customers in the non-domestic energy market as a whole.

How much compensation could I receive?

The amount of compensation you may be entitled to will depend on factors such as the amount of commission paid (i.e. whether the uplift on the unit rate of energy you paid was 3p, 5p, or 10p per kWh), and the amount of energy you consumed under each contract.  

A table indicating potential compensation rates is shown below:

Combined (gas and electricity) annual energy usage (kWh)
60,000  80,000  100,000  200,000  500,000
Total commission paid assuming a three-year contract 2p £3,600.00 £4,800.00 £6,000.00 £12,000.00 £30,000.00
3p £5,400.00 £7,200.00 £9,000.00 £18,000.00 £45,000.00
5p £9,000.00 £12,000.00 £15,000.00 £30,000.00 £75,000.00
10p £18,000.00 £24,000.00 £30,000.00 £60,000.00 £150,000.00

Can’t see the full table? You can swipe left and right to reveal all the data.

What is the legal basis of the claim?

In short, the legal basis of the claim is that the payment made by your supplier to your energy broker amounted to a bribe. Where a broker owes you a duty to provide recommendations on an impartial and disinterested basis, the acceptance of a commission conflicts with this duty as it makes it more likely that the broker will recommend the contract through which the largest commission will be paid, rather than the most suitable contract for you. If your broker obtained your fully informed consent to them accepting such a commission, there will be no claim. Where no informed consent was given, there will be a claim for compensation.

Why do you characterise the payment of hidden commissions in these circumstances as a bribe?

We do not allege that the supplier or broker has committed a criminal offence. Instead, we say that the payment of a commission from the supplier to the broker without the customer’s informed consent amounts to a civil law bribe, which gives rise to a claim against either the broker or the supplier.

These payments necessarily interfere with your broker’s duty to provide you with impartial advice as to the most suitable energy contract. By paying a commission to your broker, your supplier is effectively inducing the broker to make a particular recommendation that they may not otherwise make, and that may not be in your best interests.

What documentary evidence will I have to provide?

It will be necessary for you to provide at least one of the following documents, in respect of each energy contract or site that you wish to claim:

(i) an energy bill; 

(ii) the contract between you and your energy supplier; and/or

(iii) the contract between you and your energy broker.

You will also need to confirm to us that you were not properly informed by your broker that a commission was paid by your supplier to your broker.  We will explain the precise nature and effect of the confirmation you need to give to us through our online questionnaire once you have begun the registration process. 

In addition, so that we can complete ‘know your client’ checks, we will need to ensure that you (i.e. the individual who is instructing us on behalf of your business) either pass an electoral role check or another identity check. It may therefore be necessary for you to provide a copy of your passport of driving licence.

What witness evidence may I have to give?

In a claim like this in which there are likely to be thousands of individual claimants, it is statistically very unlikely that you will be asked to provide witness evidence. Evidence is also usually provided though solicitor witness statements and experts on behalf of the claimants. 

You will however need to confirm, on behalf of the business, that you did not know about the payment of the commission. You will also need to provide us with documents relating to your claims such as energy contracts and/or energy bills.

You should also issue what is called a ‘document hold notice’ throughout the business, in order to preserve any disclosable documents which you may in due course need to produce to the court.  We will explain this in more detail during the registration process.

What will it cost me to join?

We act on the basis of a damages-based agreement (‘DBA’). This is a form of no-win, no-fee agreement, so there are no up-front costs to join the claim. Harcus Parker will meet the costs of pursuing your claim, including court fees and the fees of experts and counsel etc. In the event that your claim succeeds, we will charge you 33% of the damages received by you plus VAT (if applicable) plus your proportionate share of disbursements such as After the Event Insurance premiums. 

Are there any circumstances in which I may have to pay my legal team’s costs?

We are acting on a no-win, no-fee basis. If the claims succeed, you will pay us 33% of your claim proceeds, plus VAT (if applicable), plus your proportionate share of disbursements.

If the claims do not succeed, we will not charge your for our costs incurred in pursuing your claim. 

If you terminate your retainer with us after we have carried out work on your behalf, we may elect to charge you other than in accordance with the above, as set out in the damages-based agreement which is available through our registration questionnaire and which you should read carefully and in full.

How long may the litigation process take?

Litigation can take many years to reach a conclusion and this is particularly true in group claims such as this. Businesses should not expect a quick resolution and should be prepared for the claims to take up to around 5 years. It is possible that the defendants elect to settle the claims at an early stage, in which case a much quicker outcome might be achieved.

Who will give instructions to Harcus Parker on my behalf?

In group claims such as this, it is not practically possible for solicitors to take individual instructions on the management of the claim from each business.  Instead, the Litigation Management Agreement (or ‘LMA’) that each claimant signs when instructing Harcus Parker establishes a committee of claimants who will give Harcus Parker day-to-day instructions as to the management of the claims. The LMA also makes provision for the way in which certain decisions (including as to settlement) will be taken, and what you can do if you are unhappy about the way the claims are being run. It is important that you read the LMA carefully, along with the rest of Harcus Parker’s retainer.

Who are the committee?

The committee will comprise directors and members of the claimant businesses who are interested in taking a more active role in the litigation. If upon registering you are interested in becoming part of the committee, please get in touch. For practical reasons there will be an upper limit on the number of committee members, but the intention is that the committee should be representative of the claimant group as a whole.

Who are the members of the legal team?

Damon Parker is the Partner with overall management and supervision of the case. Mr Parker will be supported by Matthew Patching, a Senior Associate at the firm, and Olivia Selley, who is an Associate. We will involve other lawyers where that is appropriate, so that work is done at the right level of seniority and experience (and, therefore, cost).

How will the claims be run?

The claims will be run on a group rather than an individual basis. This means, that your claim will be grouped together with the claims of other businesses. There are various reasons for managing claims in this way, but the main reason is to benefit from economies of scale so that the claims are financially viable and so that legal work is not duplicated across claims.

Who are the advisory board?

The advisory board will comprise experts from industry with a good understanding of the energy market and how businesses interact with the markets. The advisory board will be on hand to support the work of the claimant committee.

Who is supporting the claim?

Harcus Parker will partner with a charity working in the energy sector that aims to support businesses and/or green energy incentives and a range of other charities supporting people and businesses which are acutely affected by the ongoing cost of living crisis. We will donate a proportion of our fee to these charities. This will not affect the amount that you receive because the donation will be met entirely from Harcus Parker’s proportion of the proceeds should the claims succeed.

We are also supported by the SME Alliance.

Can I join if my energy supplier(s) have changed?

Yes. You can register your claim in respect of any energy contract for which you have records. We will assess each claim once you have completed our registration form. When you complete the process, you will be invited to provide details about each of your energy suppliers and the agreements that you had with them.

Will you sue my broker; and if not why not?

Although your broker and energy supplier are jointly liable to you in respect of the undisclosed commission, we do not at this stage intend to pursue your energy broker. There are two main reasons for this:

  1. Administrative workability – There many hundreds more energy brokers than there are suppliers. It is therefore administratively more straightforward, and therefore more cost effective to group claimants’ claims against a smaller number of suppliers.
  2. Resources of the defendants – Suppliers are generally better resourced than brokers. This means that they are more likely to be in a position to repay the commissions owed to you. Furthermore, your broker may have gone out of business since placing your contract, making recovery much more difficult. 

If there are particular circumstances that make it attractive to issue proceedings against an individual broker, we will do so.

Who will the defendants be?

The defendants to your claim will be the energy suppliers that you entered into energy contracts with from time to time. Harcus Parker may elect to pursue only certain energy suppliers if it becomes clear that the majority of claimants’ claims are against a select group of suppliers. It may well not be possible to claim against every supplier, at least in the first instance.

What are my responsibilities in the litigation?

As the sign-up process makes clear, you are asked to execute formal legal documentation. As a claimant, you will be a party to legal proceedings. You must respond quickly and fully to any questions we ask you which relate to your claim. We will keep these to a minimum.

We will use the information that you provide to put forward your claim. This will involve us making representations to the defendant and to the Court and signing statements of truth on your behalf. It is essential that what we say is true. If the contents of a statement of truth are not true, contempt of court proceedings can be brought against you and us.

You will also have a duty to disclose (that is, tell the other side about and provide copies of) documents which might be relevant to your claim regardless of whether they are harmful or helpful to your own case. This means that whilst you are a claimant you must keep such documents safe and be prepared to produce them if required.

What is a ‘document hold notice’?

This is a notice circulated by a business to its staff requiring them to preserve all documents and data that might relate to a legal action in which the business is involved. The notice should operate to suspend any of the business usual document retention policies to ensure that no documents relevant to the litigation are lost or destroyed.  

These notices are required because in litigation there is a requirement for all parties to disclose all documents relevant to the claim, whether or not it is favourable to their position. The notice will apply equally to electronic and hard copy documents. 

You should issue a document hold notice as soon as practicable following your registration for the claim.  A specimen document will be provided to you as part of the registration process.

What happens if the claims are unsuccessful?

The usual rule in litigation is that the losing party is ordered to pay the costs of the successful party. If the claims fail therefore, there is a risk that you will be ordered to pay a share of the defendant’s costs. We protect claimants from that risk by taking out a suitable policy of After the Event Insurance which is designed to meet these costs for the claimants. If the claims succeed, you will pay a proportion of the cost of this insurance policy from your claim proceeds, in addition to the Solicitor’s Fee.

Are there any risks associated with participating in the claim?

We seek to eliminate all of the risks inherent in the litigation process, but there are some risks, however slight, which cannot be eradicated in their entirety. We list them below, with an explanation of what we do to mitigate them and why accordingly we are content to advise that your participation in the litigation will be, for practical purposes, risk free.

Risk 1: the insurer may deny or seek to withdraw cover, either after the unsuccessful conclusion of the case, or while the case is continuing.

It is our responsibility to ensure that the insurers are fully informed about all aspects of the case so that it is not open to them to refuse to honour a claim if the case is lost. We are invested in the case, and we are equally anxious as you will be to ensure that the insurers are fully informed and have no reason to refuse cover.

Risk 2: the insurer goes out of business

There is a possibility that the insurer fails so that they are unable to pay. There is nothing we can do about this risk, other than to seek to take cover from insurers whose rating is sufficient to give us comfort that they will be able to pay. We mitigate the risk by sourcing insurance through expert insurance brokers who advise on the quality of the cover.

Risk 3: the group does not attract sufficient claimants

There is also a further theoretical risk, which is highly unlikely to come about in one of these claims: that the case is successful but any recoveries for the claimants are limited.

The terms of the DBA are such that we cannot take more than 50% of any damages you receive, but if too few claimants instruct us, so as to make the case not economically viable, we may have to terminate our retainer with you. This is extremely unlikely, and we would consult the Committee before doing so in order to make sure the group could continue to be adequately represented, if at all possible.

Risk 4: You succeed in your claim but other claimants fail in theirs 

The insurance will be on a pooled basis, so that it will respond only if the Claimants’ claims as a whole fail. If some claimants succeed and others fail, they will pay out only to the extent that the costs payable to the defendants in respect of failed claims cannot be paid from the amount recovered for successful claimants. This is unlikely to have a significant effect on any successful claimants.

Claim Calculator

Enter your estimated annual energy usage, commission and length of contract below to see how much you could claim.