All Tangled Up: British customers bring lawsuit against electricity cable suppliers
May 31, 2022
2 min read
What's going on here?
European power cable suppliers are facing a UK class action lawsuit by British electricity customers for allegedly inflating their energy bills due to anti-competitive behaviour.
What does this mean?
On Wednesday 11 May 2022, a class action lawsuit was made public alleging that European companies Prysmian Spa, Nexans SA and NKT A/S surcharged network operators for power cables and, as a result, have increased consumer bills since 2001. This claim comes in light of the 2014 decision by the European Commission, which found that 11 cable manufacturers had operated a ‘near-global cartel’ in supplying power cables between February 1999 and January 2009. Yet to be served with papers, the manufacturers were fined €302m by the EU Commission.
The UK lawsuit is being led by former head of Britain’s gas regulator, Clare Spottiswoode, who is being advised by law firm Scott+Scott. Spottiswoode hopes “this will send a warning message to any corporates who might contemplate anti-competitive behaviour”. The claim has been applied to the Competition Appeal Tribunal, and approval will be needed for Spottiswoode to bring a collective action on behalf of UK consumers against the European power cable suppliers.
What's the big picture effect?
Although largely overdue, this case has the potential to compensate British consumers for unfairly being charged artificially inflated prices for the past 10 years. In light of increased oil and energy prices, this case is likely to gather much attention as UK citizens are continuously facing rising prices. Public distrust in energy suppliers is only getting worse, and therefore retribution for inflated prices is likely to garner widespread support.
This is the latest class action suit to be brought under the Consumer Rights Act 2015 (CRA 2015). The CRA 2015 aims to make it easier for individuals to collectively pursue financial compensation against larger corporations if antitrust law has been broken. James Hain-Cole, Counsel at Scott+Scott, suggests that this collective action supports consumers as individual claims would be “prohibitively expensive” and are unlikely to go far. Therefore, a collective claim is the viable option for attempting to seek compensation.
Moreover, similar US-style mass lawsuits are already progressing through the courts. The most notable case so far is a £10bn lawsuit brought by Walter Merricks on behalf of millions of consumers against Mastercard for charging interchange fees to retailers for card use that allegedly broke EU competition law. The introduction of the CRA 2015 indicates that Spottiswoode has the opportunity to succeed through the courts. If this case is successful, we may see a continued trend of an uptick in class action lawsuits against corporations. Consequently, European power cable suppliers have gotten themselves tangled up with British electricity consumers’ need for financial retribution, but whether it will be a successful outcome remains to be seen.
Report written by Sofia Antipatis
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