Care homes are among millions of businesses and community organisations that lawyers say could be entitled to compensation from UK energy giants over alleged secret commissions paid to third-party brokers, inflating customers’ bills by billions of pounds.
Litigation law firm Harcus Parker last week began sending letters before action to energy companies in the first step in group litigation to reclaim undisclosed commissions paid by suppliers to brokers without customers’ knowledge.
Gas and electricity suppliers are accused of offering these payments to incentivise brokers to sign up customers, ignoring whether energy is or is not cheaper for the end user, who is unaware how much money is being siphoned off to the broker.
Small- and medium-sized businesses including care homes, schools, faith groups, charities, sports groups, local authorities and other community organisations are all said to have been targeted by unscrupulous brokers.
In some cases, the secret payments have inflated bills by 50% in a practice that appears to have developed over the last 20 years.
The litigation is being launched as the Government drastically scales back subsidies given to millions of struggling businesses and community organisations under the Energy Bill Relief Scheme. From April, most non-domestic energy customers will receive a subsidy of just 2p/kWh.
Damon Parker, senior partner of Harcus Parker, said: “We 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.
“Gas and electricity prices has undoubtedly hit care homes particularly hard.
“The aim is to help businesses recoup some of these secret commissions for them from the energy companies that may help ease the financial burden of the energy crisis.”
It is calculated that, at any one time, around two million non-domestic customers are paying these undisclosed fees.
Harcus Parker, which has already signed up several hundred claimants, says that the average claim is currently around £20,000 per customer but it tends to be higher for care homes.
It has in excess of £10 million of litigation funding to fight the case and believes the total amount owed by the energy companies could top £2 billion.
Parker 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.
“I would urge all non-domestic energy customers who have used a broker to source their energy supply and were not told how much and how their broker would be paid to see if they are eligible to claim.”
