Small business compensated in “mis-sold” energy contract case

Following a legal case, energy supplier ENGIE was held liable, resulting in a small business being compensated for “mis-sold” energy contracts.

An energy claims specialist has facilitated the recovery of thousands of pounds for a small amusement arcade business, following a legal case where ENGIE was held liable.

The business, operating as “Queenie’s Casino Slots,” received over £10,000 as a result of the court claim brought forth by Business Energy Claims (BEC).

BEC, based in North Tyneside, is urging businesses and other non-domestic energy users, including charities, sports and social clubs, and places of worship, to assess whether they might have been misled and mis-sold energy contracts.

A few months ago, Ofgem launched a consultation to enhance service standards for businesses and improve transparency regarding costs associated with third-party energy brokers.

Business groups had previously voiced concerns to Ofgem regarding the necessity for increased support in energy matters, prompting this decision after thorough engagement with stakeholders.

Callum Thompson, Managing Director at BEC, said: “This case has the real potential to open the floodgates to other businesses and organisations large and small which may have been misled and as a result mis-sold energy contracts.

“What we are looking at is a multi-billion pound issue which could affect thousands of businesses and other organisations who may or may not realise they could have a claim.

“We want to ensure these consumers understand that if they thought the commission in an energy contract was being paid by the supplier and didn’t impact on their costs, then they are sadly wrong.

“As businesses and others continue to struggle against a growing cost of doing business crisis, it has never been more important for consumers to be fully informed about energy contracts and to question anything which doesn’t sit right.”

Chris ShawChair of the Energy Consultants Association, told Energy Live News: “BEC and other claims farmers have been running the same hyper inflated fantasy land stories for months. An unreported County Court decision that isn’t legally binding hardly seems to be a “landmark case”.

“Reported” County Court decisions in the cases of Leicester Indoor Bowls and The Dark Blue Pig (also against ENGIE) were resounding victories for energy brokers and suppliers – with the claimant in one ending up with a costs bill of £20,000.

“Mr Thompson and his father who is also listed as a Director in Business Energy Claims were involved in Utilitywise.”

Subsequently, several years after they left, the company collapsed resulting in 600 people losing their jobs.

“BEC started in 2018 so it’s interesting that it seems to have taken them until 2024 for them to record a county court case win with so many millions of claims apparently circling round.

“Unsurprisingly the figures that they use are sensationalist – created purely to try and drive media coverage to ultimately a rather small issue.

“Cornwall Insight in their annual report confirms that the total commission earned by brokers for facilitating SME contracts was £270 million in 2023. The penetration rates of SME using brokers have been increasing year on year since 2000 so it is logical to assume that this number also drops significantly in prior years.

“This is in stark contrast to the figure of £2.25 billion plucked out of the air by Mr Thompson.

“This is complex issue and cases are very fact specific – with huge variations on how brokers disclose commissions. Cases will undoubtedly need to go through the higher courts over the coming years to get final clarity – but I expect that will take years and years to gain final clarification sadly.”

Energy Live News has approached ENGIE and Ofgem for comment.