The Good Law Project, Fuel Poverty Action and the Highlands & Islands Housing Association’s Affordable Warmth Group is planning to sue Ofgem on allegations it has “failed to mitigate the impact of rising energy bills on consumers”.
In a statement, the Good Law Project will ask the High Court to ensure Ofgem upheld its legal duties in carrying out an impact assessment that included assessing the disproportionate impact on elderly people, children and people with disabilities, before confirming the price cap increase.
In doing so, Ofgem will be required to show proof it has carried out a proper impact assessment and has also considered appropriate mitigation measures for the most vulnerable, including a lower social tariff.
This is also likely to be the first legal action of its kind over the energy bills crisis, Good Law Project stated.
Commenting on the allegations, Jo Maugham, director of Good Law Project, said: “The announcement today will devastate families. Just who and what is Ofgem for? Do not be fooled. This is a choice. And the choice they’ve made is to let low-income consumers and small businesses bear the brunt of this crisis.
“We believe Ofgem can, and should, do more. We intend to put the question before the High Court and will ask for a fast-tracked timeline to reflect the urgency of this crisis.
Prior to the rise in the energy price cap announced on 26 August, the Good Law Project threatened Ofgem with court action should it fail to comply with its legal duties to protect vulnerable customers amid plans to raise the energy price cap.
The increase will see the energy price cap rise to £3,549 per year for dual fuel for an average household once in effect from 1 October 2022, which as the Good Law Project has stated, will push millions into poverty this winter.
The energy price cap increase reflects growing concerns around the global wholesale gas market with prices expected to surge in the winter months. High wholesale prices over the second half of 2021 and into the beginning of 2022 led to nearly 30 suppliers collapsing, along with Bulb entering Special Administration, since September.
In order to prevent a similar catastrophe for suppliers this winter, which could prove devastating on the British public, the increase protects energy companies whilst also providing consumers with best set energy rates. This is of importance with 60% of remaining smaller energy suppliers “technically insolvent”, according to accountancy firm Price Bailey.
“We know the massive impact this price cap increase will have on households across Britain and the difficult decisions consumers will now have to make. I talk to customers regularly and I know that today’s news will be very worrying for many,” said Jonathan Brearley, CEO of Ofgem, on the energy price cap rise.
The Good Law Project continues its momentum off the back of a successful legal case against the UK Government and its “unlawful” net zero strategy, casting its eyes to the ongoing energy price cap increase within the energy sector.
Action brought by Good Law Project, Client Earth, Friends of the Earth and climate campaigner Joanna Wheatley claimed that the government had acted unlawfully because its own net zero strategy, unveiled by the BEIS last year, does not comply with the legal requirement set out within the Climate Change Act.
And in a judgement and order, the High Court upheld those claims, ruling that government proposals for meeting net zero were too vague to offer certainty that statutory targets would be met. This increases the pressure on Ofgem.
