Free Guide - Understanding Business Energy Claims

When you are running your own business, energy costs can be one of your largest overheads. For high-consumption businesses in particular, even a small increase in unit rates can result in substantial additional costs over the life of a contract.

Many UK businesses use energy brokers to help them find and negotiate electricity or gas contracts. For a long time, most businesses assumed this was a straightforward, low-risk way to secure competitive prices.

However, in some cases, brokers received commission from energy suppliers which may not have been clearly disclosed or properly explained to the customer. Where that commission was built into the unit rate, the business may have paid more for its energy than it otherwise would have done.

If you’ve ever wondered whether your business paid more for energy than it should have, you’re not alone.Recent legal developments have strengthened the position for businesses where broker commission was hidden, unclear, or not properly explained.

Here, we explain what a business energy claim is, who may be eligible, and how high-usage businesses owners can start reviewing whether they may have a claim.

What is a business energy claim?

A business energy claim is a legal claim brought by a business that believes it was overcharged for energy because of undisclosed or inadequately disclosed broker commission.

In many cases, brokers were paid commission by the energy supplier, and that commission was built directly into the unit rates charged to the business. Problems can arise where the broker presented themselves as acting in the business’s interests, but did not clearly explain how they were being paid, how much commission they would receive, or how that commission affected the final contract price.

Recent Supreme Court decisions have strengthened the law in this area. Where a broker owes what is known as a fiduciary duty to a business, they must:

Act loyally and in the customer’s best interests
Avoid conflicts of interest
Not make a secret profit from their role without the customer’s fully informed consent

If commission was secret, or disclosed in a way that didn’t allow the business to properly understand or agree to it, that conduct is unlawful. As a result, many businesses that previously thought they had no claim may now be able to recover losses caused by inflated energy prices.

Who is eligible?

You may be eligible to bring a business energy claim if most of the following apply to you:

You used an energy broker or intermediary rather than contracting directly with a supplier
The broker presented itself as acting for your business, not as a sales agent for the supplier
You did not agree to a clear, upfront broker fee paid directly by your business
You were not told how much commission the broker would receive, or how it affected your energy prices
Your business paid materially more for energy as a result

Claims are often strongest for higher-consumption businesses, where the financial impact of undisclosed commission is greatest. This includes sectors such as:

Manufacturing and industrial operations
Logistics, warehousing and distribution
Care homes, hospitals and large care providers
Hotels, leisure venues and hospitality groups
Large retail sites and multi-site businesses
Agricultural and food production businesses

In these cases, undisclosed commission can add tens, or even hundreds, of thousands of pounds to energy costs over the life of a contract.

How to make a claim?

Making a business energy claim usually starts with reviewing how your energy contract was arranged and what you were told at the time.

Strong claims typically involve businesses that:

Used a broker to source or negotiate their energy contract
Were not given clear information about broker commission
Suspect their energy prices were unusually high or uncompetitive
Have kept copies of contracts, bills, and at least some broker correspondence

A legal review can assess whether the broker owed fiduciary duties to your business and whether commission was unlawfully concealed. If so, you may be able to bring proceedings to recover losses caused by inflated energy prices.

If you have any thoughts on this topic, or any other consumer issues you would like us to cover, feel free to get in touch with us at support@resolver.co.uk