Legal experts believe the ruling could be the beginning of a claims larger than those made following the Payment Protection Insurance (PPI), which saw more than £38bn paid out to customers mis-sold the product between 1990 to 2010.
“The claims are in the billions. This ruling opens the flood gates to businesses who believe they have been mis-sold to,” Victoria Myers, director of specialist litigation firm Energy Solicitors, told The i Paper.
The broker fee claims could stretch back to 2000, when Ofgem deregulated the brokerage market.
“Running a business is hard enough and energy prices are already high, so the last thing businesses need is to pay hidden and undisclosed commission for their energy, increasing these already high costs.
A spokeswoman for the Utilities Intermediaries Association (UIA), which represents broker and other third party intermediaries (TPIs) working in the energy sector, said: “Anyone in business understands, or should understand, that services come at a cost.
The UIA spokeswoman added that if energy suppliers had to lose billions following business claims, corporate and domestic customers would end up bearing the cost of the payouts.
Energy broker commission is added to business energy bills – often hidden in the customer’s tariff – and can account for up to 50 per cent of the total costs, according to research from industry regulator Ofgem.
However, industry chiefs believe businesses should have known that energy broker advice would have included a fee.
The case centred on broking firm Utilitywise selling five contracts in 2016 and 2017, with start dates extending into summer 2022. Utilitywise fell into administration in 2019.
According to Energy Consultants Association (ECA), the ruling is “extremely specific to Utilitywise, Engie, and their sales practices from almost a decade ago”.
A spokeswoman for Energy UK, which represents energy suppliers, said: “As the majority of non-domestic contracts are secured through brokers, the industry has long called for them to be regulated in the same way as the rest of the market.
A spokesman for Bionic, one of the leading UK energy brokers, added: “Brokers play an invaluable role for Britain’s busy business owners, helping them compare providers, understand the available options, and complete the switch on their behalf.
“While we cannot comment on the practice of other providers, Bionic has disclosed commission to our customers since 2016, some six years before it became a legal requirement.”
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