Government settles 2011 feed-in tariff damages claims

Five solar installers are celebrating after they reached an out of court settlement for damages following the government’s unlawful changes to the feed-in tariff in 2011.

Law firm Asserson, which has represented solar installers throughout the landmark case, announced yesterday that it had successfully settled with the Department for Business, Energy and Industrial Strategy (BEIS) on behalf of the five claimants it represents, bringing to an end a complex case which has raged for more than six years.

Damages were due to have been decided over a ten-week trial commencing in January 2018, however the government elected to settle out of court.

Installers were collectively seeking around £240 million but the terms of the settlement are confidential.

A spokesperson for the Department for Business, Energy and Industrial Strategy said: “The Department for Business, Energy & Industrial Strategy has settled litigation following a legal challenge to tariff changes proposed in 2011 by the Department for Energy and Climate Change. The tariff changes were proposed because of the urgent need to protect energy customers from the rising costs of the feed-in tariff scheme. Government continues to review the scheme to ensure it represents value for money for bill payers and a fair return for investors.”

The case stems from cuts to the feed-in tariff announced in October 2011, when the government revealed it was to more than half the small-scale solar tariff from 43.3p/kWh to 21p/kWh.

Despite previously claiming that it would not be reducing the FiT before 1 April 2012, the government enacted the cuts from 12 December 2011, leading to what Asserson described as “chaos” in the domestic solar market.

A tranche of installers then pursued the government and Asserson led a judicial review throughout the following years on the basis that the changes were unlawful. It succeeded in the High Court in 2011, and the then-Department of Energy and Climate Change (DECC) was unsuccessful in its appeal against the decision at the Court of Appeal.

Asserson then pursued preliminary issues in its damages claim leading once again to trips to the High Court and the Court of Appeal. Decisions were still made against the government and a trial was listed to start in January.

Claims were brought forward by Asserson under the Human Rights Act, which earned the case recognition in legal circles. Had it proceeded to trial the case would have set a new record as the largest Human Rights Act damages claim in English history.

Trevor Asserson, partner at Asserson, said that the settlements were evidence that pursuing claims against the government is a “real option” for those who suffer at the hands of unfair decisions which breach their fundamental rights.

“This outcome is a victory for the solar industry and vindicates the way the industry reacted to the government’s actions at the time in 2011. This will hopefully encourage more careful government decision-making in the future,” he said.

Case timeline

31 October 2011

The Department of Energy and Climate Change confirms its intent to slash the feed-in tariff for new solar installations installed from 12 December 2011.

21 December 2011

Proceedings against the government are heard at the High Court, and Mr Justice Mitting rules in favour of installers such as Homesun and Solarcentury, and Friends of the Earth. The government immediately confirms its intent to appeal the decision.

25 January 2012

The government’s appeal is heard at the first possible attempt but is unsuccessful. Lord Justice Moses upholds the original decision, albeit on slightly different grounds.

January 2013

A total of 17 solar installers confirm that they plan to sue the government over the unlawfulness of the its decision, increasing the amount sought for damages from £2.2 million to £140 million. The government sought permission to take the appeal to the Supreme Court, but was denied.

9 July 2014

Damages claims begin at the High Court, heard by Mr Justice Coulson, who again rules against the government.

28 April 2015

The government is again beaten at the Court of Appeal following a three-day hearing that took place the month before. Master of the Rolls, the country’s second most senior judge who at the time of the decision was Lord Dyson, was supported by Lord Justice Richards and Lord Justice Ryder in dismissing both the government’s appeal and cross-appeal.