Understanding Business Energy Claims

When you are running your own business, it can be hard to keep track of your bills. So if you are being overcharged it may take a while to notice.

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, it has recently been revealed how some brokers were paid commission by energy suppliers without properly telling their customers – who have paid significantly more than they should have.

If you’ve ever wondered whether your business paid more for energy than it should have, you’re not alone. The law has recently become much clearer, and many businesses may now be entitled to recover significant sums.

Here we explain what a business energy claim is and how business owners can ensure they get redress for being mis-led by brokers and overcharged for their utilities.

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 arise when the broker was acting in a position of trust– for example, presenting themselves as working for the business’s interests – but failed to clearly explain how they were being paid or how that commission affected the final 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 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