The UK’s High Court ruled on Wednesday that 14 solar companies affected by feed-in tariff cuts in 2011 may pursue a claim for damages.
The group was pursuing £132 million (US$225 million) in damages following the Department of Energy and Climate Change’s (DECC) “legally flawed” cuts.
The companies claim that the “unlawful and unfair” cuts to the feed-in tariff caused their businesses substantial damages resulting in thousands of redundancies.
Prospect Law, the group’s legal representation, claims that it has obtained a ruling on “the essential legal questions in the case”. The group is seeking damages under the Human Rights Act 1998; in order to do so the claimant companies had to prove that they had ‘possessions’ for the purposes of the European Convention on Human Rights.
Mr Justice Coulson ruled that the claimant firms did have possessions; that DECC unlawfully interfered with their possessions; and that DECC's conduct caused substantial losses which were not justified.
In addition, Mr Justice Coulson ruled that the companies are entitled to “just satisfaction” for losses incurred as a result.
The judge added: “Although the entitlement to damages will ultimately depend on the facts, as a matter of general principle, the claimants have demonstrated an entitlement to damages assessed by reference to the loss of those possessions for which recovery is permissible, namely signed/concluded contracts and/or the marketable goodwill referable to such contracts.”
A DECC spokesperson said: “We are unhappy about this judgement and will be appealing against it. We believed we were proposing lawful changes to subsidies, which would protect consumers from rising bills at a time when windfall profits meant the industry was booming.
“Solar is a huge success in the UK, worth £2.2 billion a year, thanks to government support, and the tariff changes that protected consumers from a £50 a year bill rise by 2020 haven’t changed that success.”
Prospect Law has said DECC’s decision to appeal is “extremely unfortunate” and urged it not to fight the ruling. DECC appealed against the High Court’s ruling that the changes were unlawful but lost at both the Court of Appeal and the Supreme Court.
“What we want to do as an industry is draw line under this. It would be extremely unfortunate if DECC do what they did in the Feed-in Tariffs (FiT) and drag out this process,” a spokesperson for Prospect Law said.
Additional reporting by John Parnell