Significant case judgment against energy broker saves small business close to £4000

A LEADING energy litigation firm has won a noteworthy case against an energy broker seeking to claim lost commissions from a small business. The judgment, in what is believed to be a national first, sought to protect businesses from unscrupulous scaremongering by energy brokers seeking to ‘pressure’ them into questionable contracts. 

Energy Solicitors Ltd (ESL) represented Petro’s Handyman Service, a Cambridge-based property maintenance firm, in a case brought by energy broker Utility Savings Group Ltd. The case, heard at the Cambridge County Court, was in relation to lost commissions amounting to £3930.58, after the energy broker claimed to have secured three energy contracts for the small business. 

Despite the contracts not proceeding due to other agreements in place, the energy broker still insisted that they were entitled to the commission they would have received had the contracts gone ahead. Petro’s said that they felt ‘pressured’ into the contracts that the broker presented them with.

While the broker attributed their alleged losses to a customer default from the contracts not going through; ESL argued that there was no customer default to begin with as the contracts had never come to fruition, nor did the agreement of alternative contracts amount to a customer default.  

In this case, the contracts presented by Utility Savings Group Ltd were never implemented and despite a signed Letter of Authority from Petro’s Handyman Service, the broker failed to cancel any existing contracts on their behalf.

The Cambridge County Court ruled in favour of Petro’s Handyman Service and dismissed the energy broker’s claims, finding that there was no default on part of the customer and that the broker’s losses were not a direct result of Petro’s acts or omissions. Additionally, as the commission demanded in compensation was based on future loss and could therefore only be based on estimated usage, it is impossible to prove any financial loss the broker claimed they incurred. 

Whilst a further element of the broker’s alleged loss was the inclusion of VAT on top of their commission, ESL argued that had the contract gone live, VAT would not be payable on top of the commission. The Judge deemed that even in the event of a breach by the customer, which in this case there was none, there was no evidence to suggest that Petro’s was liable for the VAT. 

Commenting on the case and today’s energy landscape, Victoria Myers, Senior Partner at Energy Solicitors Ltd, said, “We are very pleased with the judgement passed by the Cambridge County Court, as it is not uncommon for energy brokers to resort to implementing legal tactics to intimidate small businesses in relation to recouping lost commission - the case of Petro’s Handyman Service is just one instance amongst many. 

“Today’s energy broker market is highly unregulated. This, coupled with the complexity of the industry and the consumer’s lack of clarity in what they are paying for, has created room for exploitative business practices that are having an adverse financial impact on businesses.” 

Speaking on the case, Petro Kulynycz, owner of Petro’s Handyman Services, said, “As a small business owner, receiving a legal notice from an energy broker was really daunting. Being pursued and intimidated for commission was an added pressure we didn’t need, on top of rising energy costs. 

“We certainly won’t be the only small business in this situation, but we are hugely grateful to Energy Solicitors for their support in this case. Their expertise and knowledge of the industry were invaluable to achieve the outcome we’d hoped for.”

Energy Solicitors Ltd is a leading law firm that specialises in energy litigation. The firm’s in-depth understanding of the energy sector and their expertise in legal claims processes has enabled them to support, counsel and aid businesses in tackling legal issues that arise as a result of a fragmented energy market.