‘Unlawful’ REAL consumer code called into question

The law firm behind the Supreme Court victory, which ruled premature cuts to the feed-in tariff were unlawful, has challenged the legality of the Renewable Energy Assurance Scheme’s (REAL) code of conduct. Prospect Law, acting on behalf of Crystal Windows and Doors Ltd, claims that REAL changed crucial parts of the code without consent from the Office of Fair Trading (OFT).

Furthermore, Prospect Law also claims that when the OFT approved the changes to the REAL code retrospectively, that process too was unlawful.  In addition, REAL was issued with a High Court Claim on July 3 over allegations that it acted beyond its powers and unfairly towards its members.

The legal firm contests that one of the most significant clauses in the Code was removed; the requirement to act “quickly and fairly” over complaints directed towards its members. As the requirement to act fairly is a key tenant of the OFT guidelines, Prospect Law believes its removal without prior approval was unlawful.  

A spokesperson from Prospect Law said: “On June 18, REAL altered the Code under which it operates in a number of fundamental respects. These alterations included the removal of the requirement to act "quickly and fairly" in relation to complaints against member firms. The alterations to the Code by REAL required prior approval from the OFT. This prior approval was not obtained. Instead, on July 12, over a week after Crystal launched High Court proceedings against REAL asking for a declaration to be made that the altered Code was unlawful, the OFT retrospectively ‘approved’ the code.”

“Prospect Law has now written to the OFT pointing out that this decision is itself unlawful. We have alerted the OFT to the serious concern the current situation is starting to cause amongst Members of REAL and indeed consumers who are asking us: how can we have faith in REAL's conduct or authority when the altered Code under which it operates has itself been unlawfully introduced? Prospect Law has asked REAL to withdraw the altered Code with immediate effect. REAL has refused this request and we have now asked the OFT to step in and force REAL to withdraw the unlawfully altered Code with immediate effect.”

Prospect law has issued a Letter Before Claim to the OFT, warning that inaction will lead to Judicial Review proceedings. The concerned parties believe that the REAL’s conduct has undermined confidence in the consumer code. John Oddi, MD, Crystal Windows and Doors said: “REAL’s conduct has now been put well and truly under the spotlight. Earlier this month Crystal issued a claim against REAL as we believed the organisation was acting well beyond its powers, and this new evidence proves our point entirely.

"Whilst REAL says Crystal is attacking the Code, it’s quite the opposite: it is REAL which has been operating an unlawful Code without obtaining OFT approval. Bearing in mind the fact that the OFT itself says, ‘…industry bodies play an important role in facilitating competition and have obligations to ensure that firms are treated without bias’, REAL’s conduct appears totally unacceptable and to fly in the face of the OFT’s own rules.”

Oddi added: “It’s a total shambles and Crystal is taking Court action against REAL to try to set things right.”

The REAL declined to comment at this time.