Navigating Business Energy Claims: A Comprehensive Guide

Navigating Business Energy Claims: A Comprehensive Guide


Managing energy costs is really important for any business to do well.

Energy contracts can cost a lot, so businesses need to think about them carefully.

In the UK, dealing with business energy can be tricky.

This is why many businesses get help from energy brokers.

These brokers are supposed to help businesses find good deals on energy.

But sometimes, things go wrong.

Businesses might get energy contracts that aren’t right for them or cost too much.

This is where ‘business energy claims’ come in.

If a company gets a bad energy deal, they can use a business energy claim to fix it.

These claims help fix problems like hidden fees or deals that aren’t clear.

They make sure businesses get back any money they lost and fix any unfair situations.

Understanding Business Energy Claims

What Are Business Energy Claims?

Business energy claims are a response to a growing concern in the energy market, particularly around the practices of energy brokers and suppliers.

In an ideal world, an energy broker or consultant would facilitate a deal for your business that aligns with your energy usage, needs, and financial capacity. 

However, in many instances, businesses across the UK have encountered situations where their energy contracts could have been more transparent and beneficial.

This realization has led to a surge in energy mis-selling claims.

The Prevalence of Energy Broker Use in Businesses

It is estimated that around half of all UK, businesses have used the services of an energy broker to negotiate their gas and electricity contracts.

The rationale behind this choice is straightforward: businesses seek to leverage brokers’ expertise to secure the best possible energy deal, ideally cost-effective and aligned with their energy usage.

However, this trust is sometimes breached, resulting in contracts outside the business’s best interests.

Role of Third-Party Intermediaries (TPIs) and Mis-Selling Practices

Third Party Intermediaries, or TPIs, mediate between businesses and energy suppliers.

Their primary role is to secure the best possible rates for their clients from an energy supplier.

However, issues arise when these TPIs, driven by undisclosed commissions or other financial motives, recommend contracts that earn them favourable commissions from the supplier rather than focusing on the best deal for the business.

This misalignment of interests is a core issue in energy mis-selling.

Often opaque, the energy broker and supplier relationship can lead to arrangements where the business’s needs are secondary.

The Legal Aspect of Business Energy Claims

The legal framework is intricate but essential when making a business energy claim.

A mis-sold energy contract, mainly when undisclosed commissions are involved, constitutes a breach of ethical and, in some cases, legal standards.

Businesses may be entitled to claim compensation for the financial impact of such mis-selling.

This process is regulated by bodies like the Solicitors Regulation Authority, ensuring that claims are handled with legal rigour and ethical standards.

The Legal Framework and Rights of Businesses

Understanding the legal rights and framework surrounding business energy claims is crucial for any business considering a lawsuit.

Mis-sold energy contracts can range from those with hidden commissions built into the unit price to agreements arranged without fully disclosing the financial relationship between the broker and the supplier.

Current Laws and Regulations

Business energy mis-selling, while a relatively new area of law, is increasingly recognized and addressed.

Organizations like Ofgem play a significant role in regulating the energy market, including the practices of energy brokers.

The legal process of making a business energy claim involves several stages, starting from the identification of mis-selling to the actual filing of a claim.

Law firms specializing in this area are authorized and regulated to guide businesses through this process, often working on a ‘no win, no fee’ basis to alleviate upfront financial burdens.

Identifying Mis-Sold Energy Contracts

Recognizing a mis-sold energy contract is the first step towards making a claim.

Several indicators can help a business owner determine if their energy contract was not in their best interests.

Critical Signs of Mis-Sold Energy Contracts:

  1. Undisclosed Commissions: If the energy broker received a commission from the supplier not disclosed to you at the point of sale, it’s a red flag.
  2. Lack of Transparency: Contracts arranged without fully revealing the terms, including hidden fees or rates, suggest mis-selling.
  3. Contracts Not Tailored to Energy Usage: If the warranty does not align with your energy usage and needs, it might have been mis-sold.
  4. High Energy Costs Unrelated to Usage: Unusually high energy costs unrelated to your energy usage could indicate a mis-sold contract.
  5. Broker-Supplier Financial Relationships: Contracts where the broker’s financial relationship with the supplier was not disclosed may be questionable.

Being aware of these signs can help a business owner discern whether they have been a victim of energy mis-selling and if they are eligible to make a claim.

The Process of Making a Business Energy Claim

Making a business energy claim involves a structured process, often necessitating legal support to navigate the complexities of the energy market and contract law.

Step-by-Step Guide to Filing a Business Energy Claim:

1. Review Your ContractExamine your energy contract for any signs of mis-selling, such as undisclosed commissions or non-transparent terms.
2. Consult a SolicitorEngage with a solicitor experienced in energy claims to assess the validity of your claim.
3. Gather EvidenceCollect all relevant documents and evidence of mis-selling, including contract agreements, communication with the broker, and energy bills.
4. File the ClaimYour solicitor will help you file the claim, outlining the specific areas of mis-selling and the compensation sought.
5. Negotiation and ResolutionThe process may involve negotiations with the energy supplier or broker, aiming for a settlement. If unresolved, the case could go to court.
6. Legal Proceedings (If Necessary)If a settlement is not reached, the claim may proceed to legal action, where evidence is presented in court.
7. Resolution and CompensationUpon successful resolution, either through settlement or court verdict, the business may receive compensation for the mis-sold contract.
8. Post-Claim ReviewReview the outcome and implications of the claim, potentially adjusting future energy contracting strategies.
filing a business energy claim

Case Studies and Success Stories

The landscape of business energy claims is replete with successful cases, providing insight and encouragement to businesses considering a claim.

Examples of Successful Business Energy Claims:

  1. A Manufacturing Company: Recovered substantial compensation for undisclosed commissions in a multi-year energy contract.
  2. A Retail Chain: Successfully challenged their energy contract terms, significantly adjusting their future energy bills.
  3. A Small Business Owner: Identified and claimed for mis-sold energy contracts, resulting in financial compensation and more favourable contract renegotiation.

These cases highlight the potential benefits of pursuing a business energy claim and the importance of vigilant contract management.

Challenges and Considerations in Business Energy Claims

While the prospect of reclaiming financial losses from mis-sold energy contracts is appealing, there are several challenges and considerations that businesses must be aware of.

Key Challenges and Considerations:

  1. Complexity of Claims: Navigating the legal and technical aspects of energy contracts can be complex and requires expert guidance.
  2. Evidence and Documentation: Adequate evidence and thorough documentation are essential for a successful claim.
  3. Time and Resources: The process can be time-consuming and require significant resources, especially in cases that proceed to legal action.
  4. Financial Risks: While many solicitors offer a ‘no win, no fee’ arrangement, there may still be financial risks involved, especially if the case goes to court.
  5. Impact on Business Relationships: Claiming an energy broker or supplier may affect future business relationships.

Understanding these challenges is crucial for any business contemplating making an energy claim.

It helps in setting realistic expectations and preparing adequately for the journey ahead.

Future Outlook and Preventative Measures

The issue of mis-sold business energy contracts is gaining increasing attention, leading to a more vigilant and regulated energy market.

Looking ahead, businesses can take proactive measures to safeguard against mis-selling.

Preventative Measures for Businesses:

  1. Conduct Thorough Research: Research their reputation and track record before engaging with an energy broker.
  2. Demand Transparency: Insist on clear and transparent communication from your broker, especially regarding commissions and fees.
  3. Understand Your Contract: Ensure that you fully understand the terms and conditions of your energy contract, including any fees or rates linked to energy usage.
  4. Seek Legal Advice: Consider consulting with a solicitor experienced in energy contracts before signing any agreement.
  5. Regular Contract Reviews: Periodically review your energy contracts and compare them with market rates and your actual energy usage.

By adopting these measures, businesses can better protect themselves from the pitfalls of mis-sold energy contracts.


Navigating the complexities of business energy contracts and claims can be challenging.

However, it is essential for safeguarding the financial health of your business.

Being vigilant, informed, and prepared to take necessary action is vital to ensuring that your business’s energy needs are met fairly and transparently.

Key Takeaways:

  • Vigilance is Crucial: Stay alert to the signs of mis-selling in your energy contracts.
  • Legal Recourse is Available: If you suspect mis-selling, legal avenues exist to claim compensation.
  • Expert Advice is Beneficial: Engaging with legal experts can significantly assist in the claims process.
  • Prevention is Better Than Cure: Adopting preventative measures can help avoid the hassles of mis-sold contracts.

Additional Resources

For further information and assistance on business energy claims, consider exploring the following resources:

  1. Legal Firms Specializing in Energy Claims: They offer expert advice and can guide you through the claims process.
  2. Energy Market Regulatory Bodies: Organizations like Ofgem provide valuable information on energy market regulations and your rights as a business.
  3. Business Energy Forums and Communities: Engaging with other businesses can provide insights and shared experiences in dealing with energy contracts and claims.