Chip shops and fast food outlets are among millions of businesses that lawyers say could be entitled to compensation from UK energy giants over alleged secret commissions paid to third-party brokers.
London-based law firm Harcus Parker claims energy suppliers offered payments to incentivise brokers to sign up customers, ignoring whether energy is or is not cheaper for the end user. This action, it says, has inflated some bills by 50% with around two million businesses potentially affected.
Research conducted by Harcus Parker found that one energy supplier offered brokers as much as 10p/kWh in commissions that were frequently undisclosed to the customer. A large number of other suppliers offered secret commissions of between 1p-3p/kWh.
It believes the practice has been going on for over 20 years.
In response, the law firm has started a group litigation scheme to reclaim undisclosed commissions paid by suppliers to brokers without customers’ knowledge.
It says it has in excess of £10m of litigation funding to fight the case and believes the total amount owed by the energy companies could top £2bn.
Damon Parker, senior partner of Harcus Parker, said: “As the cost of energy crisis hits we are aware that it’s been particularly difficult for chip shops and other fast food outlets.
“Clearly, the rising cost of gas and electricity has been very difficult for them. On top of that the cost of ingredients has written hugely and people have less money in their pockets to spend on takeaways.
“The aim of the legal action is to help businesses recoup some of the secret commissions that were added into their bill by energy companies without the customer’s knowledge. We hope if we can do that it may help ease the financial burden of the energy crisis.”
The average claim is said to be around £20,000 per customer although long-term contracts for heavy energy users could give rise to claims of well over £1m.
Damon added: “The claims are fully funded and insured and, as a result, we are able to act for clients who ordinarily would not have the resources to access justice in a claim of this kind, on a ‘no-win, no-fee’ basis.”
A dedicated website has been set up for those wishing to make a claim: Home – Harcus Parker | Energy Claims (energylitigation.com)