A surprise Court of Appeal decision in Expert Tooling and Automation Ltd v Engie Power Ltd [2025] EWCA Civ 292 shook the commission practices of energy brokers to their core. A subsequent appeal to the UK Supreme Court in Expert Tooling was then allowed by agreement between the parties earlier this year, following a notable restatement of the law on commissions in three connected appeals about car finance commission paid by a student nurse, a postman with a penchant for fast cars and a factory supervisor in Hopcraft and another v Close Brothers Ltd UKSC/2024/0157.
At no point did energy brokers have the opportunity to make arguments in the higher courts in either Expert Tooling or Hopcraft. As a result, they now face a situation in which they must coexist with binding authority over elements of their duties to energy consumers, while also becoming subject to increasingly complex regulation by Ofgem, which acts as a potential brake on merger and acquisition activity in the sector. At the same time, their function in an unpredictable market remains as important as ever.
Commercial energy brokers introduce energy suppliers to potential customers. The ecosystem benefited all parties and continued into 2025 without interruption. Brokers helped potential customers find commercial energy deals; suppliers won customers as a result; and energy suppliers paid brokers a commission on resulting contracts. To an energy sector insider, all of this was obvious.
A latent difficulty with the model was that energy consumers did not always know whether the energy prices they paid funded broker commissions, or how much those commissions were.
This issue came before the court in Expert Tooling. Expert Tooling is a manufacturer of tools and machinery that consumes large quantities of energy; Engie is a well-known energy supplier. They entered into five contracts brokered by the now-dissolved broker, Utilitywise plc (UW).
Expert Tooling objected to the practices of UW insofar as it was aware it was being charged commission, but did not know how much. This was particularly offensive because the commission on five contracts amounted to £130,449.70, a notably high figure for the market. When UW became insolvent and was dissolved, Expert Tooling’s only recourse was against Engie.
From that moment onwards, the position of the broker in these arrangements was destined to go unconsidered. In the High Court, the parties had voluntarily narrowed the issues to concede that there existed a fiduciary relationship between the broker and the energy consumer. But Expert Tooling’s claim failed as the court found that the scope of Engie’s fiduciary duties did not extend to advising on commission.
On appeal to the Court of Appeal, Lady Justice Asplin, Lord Justice Snowden and Lord Justice Zacaroli had the benefit of the Court of Appeal decision in Hopcraft (at that stage known as Johnson v FirstRand Bank Ltd [2024] EWCA Civ 1282), which had also considered secret commissions in the motor finance industry.
They found that UW owed Expert Tooling fiduciary duties, including (i) the duty not to make a secret profit from its position as a fiduciary; (ii) to act in good faith; (iii) not to put itself in a position where its own interests conflicted with Expert Tooling’s; and (iv) not to act for its own or a third party’s benefit without the ‘informed consent’ of the consumer. Informed consent was a high bar to surmount, being based on ‘full knowledge of all the material circumstances of the nature and extent of the [agent’s] interest’.
The appeal to the Supreme Court in Expert Tooling never took place. Hopcraft, having arrived at the Supreme Court before Expert Tooling, clarified that the courts had wrongly decided a line of cases beginning with Hurstanger v Wilson [2007] EWCA Civ 299: there was, in fact, no difference between a partially revealed commission (what the Court of Appeal in Hopcraft and Expert Tooling referred to as a ‘half-secret’ commission) and a commission kept secret (a ‘fully secret’ commission).
On this basis, the parties in Expert Tooling agreed that the first limb of Expert Tooling’s appeal – that the Court of Appeal was wrong to distinguish between ‘half secret’ and ‘fully secret commissions’ – should be allowed and that the second fell away.
The judgment in Hopcraft also helped the broker’s cause. It quoted Snell’s Equity 35th edition (2025), at paragraph 7-007 with approval: ‘It is normally inappropriate to expect a commercial party to subordinate its own interests to those of another commercial party’. Although it had been conceded at first instance in Expert Tooling, conceiving of an energy broker as a fiduciary after Hopcraft is more difficult.
Nevertheless, energy brokers must now co-exist with the reality that energy consumers seeking to make claims – some encouraged by claims management companies – can point to binding High Court and Court of Appeal authority on brokers’ fiduciary role. The fact that brokers can defend on the basis endorsed in Hopcraft, by analysing a broker’s relationship to energy consumers and establishing whether fiduciary duties arise from that, is likely to be cold comfort if claims materialise.
Moreover, there is a growing nexus of regulation around the issue imposing costs on energy brokers. Revisions to Ofgem’s Standard of Conduct in 2022 and 2024 changed commission transparency rules across the sector. And now Ofgem’s moves to regulate third-party intermediaries (TPIs) to eliminate lingering secret commissions and move towards an authorisation regime are closing out the final gaps in prior regulation.
Uncertain liabilities and growing regulatory complexity are likely in themselves to act as an accounting headache for brokers and TPIs. Potential buyers of such businesses may also be deterred.
A cruel irony is that, concurrently, energy consumers may need brokers more than ever, as supplier competition and pricing complexity multiply along with instability and unpredictability on world energy markets.
Joseph Tendler is a member of the junior LSLA and legal director at Marriott Harrison
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