News Article

UK Government pay massive damages re FiT fisasco

Thursday 29th March 2018

A freedom of information request response from the Department for Business, Energy and Industrial Strategy (BEIS) has confirmed that the UK Government made nearly Â£60 million in payments to solar energy companies in a claim led by legal firm Asserson. The claim, listed by The Lawyer magazine as one of the "Top 20 Claims" for trial in 2018, was unprecedented and followed seven years of legal wrangling. The pay-out is the largest ever sum recovered by a Human Rights Act claim in the UK

The litigation was brought against the BEIS proposal to bring forward the date of cuts to "˜feed-in tariff' (FIT) subsidies to small-scale solar energy generation from the government's publicised cut-off date of 1 April 2012 to 12 December 2011, a date before the end of the consultation on the proposal itself, and before the law making the change would be approved by Parliament. The proposal had disastrous consequences for the UK solar industry, with many companies becoming insolvent and others losing millions of pounds.

Asserson had not previously commented on the amount of money paid to the claimants, because the Government had insisted that the settlement terms be kept confidential. However, in light of the Government's freedom of information response, the settlement sum is now public knowledge.

Trevor Asserson, senior partner at Asserson who ran the case, commented: "This claim was triggered by an unlawful government decision to cut subsidies to the solar energy industry earlier than the government's own published timetable. The outcome was a victory for the business sector and for human rights. This is by a significant margin the largest sum ever recovered on the basis of a Human Rights Act claim in the UK.

The precedent set by this case gives businesses real protection in the event that government unlawfully interferes with their activities."

According to The Times this morning a trial on the facts of the case and losses was scheduled for January but the government instead settled out of court. The government has not admitted liability or wrongdoing.

Background to the claim

The litigation which led to this settlement began with a judicial review of a proposal published by BEISâ€™s predecessor, the Department of Energy and Climate Change (DECC), in October 2011, when Chris Huhne was Secretary of State. The Department proposed bringing the date of cuts to â€˜feed-in tariffâ€™ (FIT) subsidies to small-scale solar energy generation from the governmentâ€™s publicised cut-off date of 1 April 2012 to 12 December 2011, a date before the end of the consultation on the proposal itself and before the law making the change would be approved by Parliament. The proposal had disastrous consequences for the UK solar industry, with many companies becoming insolvent and others losing millions of pounds.

Asserson and Sam Grodzinski QC acted in the initial judicial review, which succeeded in the High Court^[1] and Court of Appeal^[2] in November 2011 to January 2012, with the Supreme Court refusing permission for DECC to appeal further in March 2012. The courts found that the proposal was unlawful because it would change the FIT subsidy retrospectively, which the relevant legislation did not permit the Government to do. The judicial review went from start to finish including a journey to the Court of Appeal and the Supreme Court, in just four months.

In late-2012 Asserson commenced a claim for damages against DECC for losses stemming from the unlawful proposal. The claim was brought under the Human Rights Act 1998, alleging that DECCâ€™s actions had breached the claimantsâ€™ right to peaceful enjoyment of their possessions. Sam Grodzinski QC was lead counsel, supported by Tom Richards and Andrew Scott, all of Blackstone Chambers, the leading public law set. The claims totalled more than Â£250 million.

The Human Rights Act claim was the subject of High Court^[3] and Court of Appeal^[4] decisions in 2014 and 2015 regarding preliminary issues of law. Those decisions found that, on agreed facts assumed by the Court, the Government had acted unlawfully; had unjustifiably interfered with the possessions of the claimant companies and that those companies had suffered loss. In all material respects the claimants were successful, and the claims were to continue to a trial of the remaining factual and quantum of loss issues to start in January 2018. The courts found that, subject to the claimants each proving the assumed agreed facts, then DECC had breached the claimantsâ€™ rights to peaceful enjoyment of their possessions, with the possessions in question being the claimantsâ€™ contracts with third parties. The Government had to pay damages based on the value of those contracts which had been interfered with.

In the early stages of the claim Asserson represented a group of 18 claimants and there were a further 2 claimants represented by other solicitors. During the course of the case a number of smaller claimants dropped out of the claim, some due to their becoming insolvent. Asserson acted for five claimants who continued to the trial stage. Asserson achieved settlement for all five of its remaining clients in the weeks before the trial was due to commence on 22 January 2018. The trial was listed by The Lawyer magazine as one of the â€œTop 20 Claimsâ€ for trial in 2018.

This story was broken as an exclusive on Solar Power Portal

UK Government pay massive damages re FiT fisasco

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