Can an energy broker pursue a commercial loss where its commission was not fully disclosed, or not disclosed at all?
There is an important legal distinction within the energy brokerage sector that is often misunderstood.
Energy brokers are specialists in arranging energy contracts, not necessarily in interpreting the law. Yet we increasingly encounter confident legal assertions from within the sector which appear to confuse their own commercial interests with established legal principles.
Commission disclosure and contractual damages are not the same thing.
The reason is straightforward. A claim concerning commission and a claim for damages arising from a breach of contract are legally distinct.
A contractual default fee is a claim for damages, intended to put the broker in the financial position it would have occupied had the customer not breached the contract.
Consider a damages claim based on wasted overheads and administration costs. The absence of disclosure of each individual element of those costs would not, in itself, prevent the claim from succeeding.
The same principle is relevant where the broker’s financial loss arises from commission it would otherwise have earned had the customer honoured its contractual obligations.
Recent court decisions have also provided important clarification concerning commission disclosure and fiduciary duties.
In August 2025, the Supreme Court considered commission arrangements in the motor finance cases, including Hopcraft v Close Brothers. The Court rejected the proposition that motor dealers ordinarily owed fiduciary duties to customers simply because they arranged finance and received commission.
More recently, in Hogg and others v TGP, decided on 30 July 2026, His Honour Judge Parfitt applied that Supreme Court reasoning in the context of commercial energy brokerage.
The judgment recognised the commercial nature of energy brokerage, where brokers are engaged in selling energy contracts and earning commission, rather than automatically undertaking to act exclusively in the customer’s interests.
The significance is that fiduciary duties cannot simply be presumed because a broker arranged an energy contract and received commission. Whether such duties exist depends upon the particular relationship and circumstances.
However, there is a further and equally important distinction.
Even where commission disclosure or fiduciary duties are disputed, that does not automatically determine whether a customer is liable to compensate a broker for breaching a separate contractual obligation.
A contractual damages claim concerns the loss suffered as a consequence of that breach, which may include lost profit, wasted overheads or other recoverable financial losses.
For clarity and the avoidance of any doubt, whether commission was disclosed as a total monetary figure, expressed in pence per kWh, or not disclosed at all does not, of itself, determine whether a broker can pursue damages for breach of contract.
Naturally, disclosure issues may still be relevant to contractual enforceability or give rise to separate legal remedies. Each claim must therefore be considered on its individual merits.
The fundamental questions remain:
- Was there a legally enforceable agreement?
- Did the customer breach its contractual obligations?
- Did that breach cause a recoverable financial loss?
At PreAction, we regularly encounter situations where commission disclosure is presented as a complete defence to a contractual damages claim.
That is not necessarily the legal position.
A dispute concerning commission disclosure does not automatically extinguish contractual obligations or remove the potential financial consequences of breaching them.
Our objective remains to resolve legitimate commercial loss claims fairly, proportionately and without unnecessary court proceedings.
Need support with a commercial loss claim?
At PreAction, we help energy brokers navigate commercial loss disputes, with a focus on fair, proportionate resolutions.
Contact us to find out how we can support you and your business.
