This week the Court of Appeal ruled in the case of broker fees between Expert Tooling v Engie. It found that the broker who advised Expert Tooling, the now defunt Utilitywise, was in breach of its fiduciary duty to the customer.
The full court judgement is here.
The court heard commissions were paid to UW up front. The estimated consumption over the life of the contract was over 2 million kWh, producing an estimated commission of just over £112,000, UW received an up-front payment from Engie of £89,000.
However the court said: “It remains in dispute whether Tooling was told that UW’s commission was in fact added to the unit price under any of the five contracts.”
The ruling found although Expert Tooling had been told there was a comission payment, they were not fully informed as to its level, however it also said there was “no basis in law for a claim against Engie in money had and received.”
The Energy Consultants Association has commented on the decision, which shows the issues when fees are not openly divulged and although this case dates back almost a decade, there are clear issues around transparency which remain.
The ECA commented: “This week’s judgment confirms that Utilitywise breached its fiduciary duty to the customer — a finding based on the lack of informed consent around commissions. While the case is specific to Utilitywise and their practices at the time, the implications are far-reaching.
“It raises important questions about terms, transparency, and the use of Level 2 LOAs — and it’s likely to prompt further scrutiny across the industry.”
We’ve published a breakdown of what this means for brokers, what the court did (and didn’t) clarify and how the ECA is supporting its members going forward.
The breakdown is here.
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