Claimant law firm to examine whether heat network energy customers have grounds for legal claim
Law firm Leigh Day has said that residents whose home heating and hot water is supplied through a heat network could have grounds for a legal claim, and is investigating on behalf of customers.
Heat networks typically generate heating in an energy centre which is distributed via insulated pipes to multiple dwellings. They are normally managed by private companies, housing associations or local authorities.
Leigh Day said customers who receive their heating by means of a heat network are not protected by the energy price cap which is set by Ofgem to stem a spike in household fuel bills.
According to data published by the London Assembly, during the current energy price shocks some heat network consumers have been hit by price rises as high as 700 per cent.
Leigh Day is currently undertaking research "to establish how widespread the issue of excessively high charges is". It is also investigating the quality and efficiency of heat networks where excessive heat losses and other problems mean customers end up paying much more than they should for the service they receive.
In June, the Mayor of London, Sadiq Khan, called on ministers to act to ensure 400,000 Londoners who live in properties on communal heat networks wouldn’t miss out on the benefits of the energy price cap and face “ballooning energy bills”.
The Government has announced support for business energy bills which includes operators of heat networks.
However, Leigh Day said, whilst this offers some protection to customers of heat networks, it does not deliver the same protection as that given to consumers of the conventional gas market.
It is hoped that the Government’s Energy Security Bill will include measures to regulate heat network pricing to customers, but the Bill is in its early stages and in the meantime customers affected by unregulated pricing “may have a legal claim”, according to the law firm.
Leigh Day solicitor Leo Gonzalez said affected customers may have grounds for a legal claim under:
- Breach of contract: if pricing mechanisms are not being applied correctly or if their fairness can be challenged under consumer protection rules; if the quality and efficiency of heat networks breach the standards of service required by applicable contracts, leading to unnecessary higher prices.
- Competition law: given that consumers of heat networks are typically not allowed to change their provider, as it is the case in the conventional heating/gas market.
Gonzalez said: “It is concerning to read reports of enormous price increases hitting heat network consumers, often already overstretched by the cost-of-living crisis. I believe there are legal avenues that could be explored to offer some means of redress to these consumers who feel unprotected and powerless in this unregulated sector.”
The law firm has revealed that it believes some heat networks may be breaching the contracts they sign with their customers and may be breaching rules aimed at protecting consumers.
“We are therefore investigating a potential group claim on behalf of customers affected by these problems. The purpose of this claim would be to recover the excessive heating charges that individuals have had to pay,” it said.
Lottie Winson
