Energy Companies Sued over a Covert Commission Scheme which may have Cost Customers £2 Billion

Topics covered: care homes, energy crisis, litigation

Harcus Parker, a litigation firm, began sending letters before action to energy companies last week. This is the first step in group litigation to reclaim undisclosed commissions paid by suppliers to brokers without customers’ knowledge.

The scheme devised between the suppliers and brokers is said to consist of suppliers offering payments to incentivise brokers to sign customers up without any consideration of whether or not this would be cheaper for the end user. It is alleged that small and medium sized businesses, such as care homes, were targeted in this scheme, and in some cases has inflated bills by as much as 50%.

This litigation couldn’t come at a better time, with the government drastically scaling back subsidies to help struggling companies cope with the increasing energy prices.

According to Damon Parker, senior partner of Harcus Parker, they “have spoken to representatives of care homes who tell us what a huge burden their energy bills are. For obvious reasons, nursing homes cannot simply turn down the heating.” The ultimate goal here is to help these businesses recoup some of these exorbitant commissions and ease the financial burden placed on them amid the energy crisis.

According to Harcus Parker, the average claims is around £20,000 per claimant, but this tends to be higher for care homes. It is believed that the total amount owed by the energy companies could reach £2 billion.

Damon has said, “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.”

Perhaps as a result of this action some funding will open of for care providers.

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