The Energy Ombudsman route: what it covers, and what it does not

Not every business with a commission complaint needs a solicitor. If you qualify as a microbusiness, there is a free route that is worth knowing about.

Do you qualify as a microbusiness?

Under Ofgem's definition, a business is a microbusiness if it meets any one of these:

• fewer than 10 employees, or their full-time equivalent, and an annual turnover or balance sheet total of no more than 2 million euro
• annual electricity consumption of no more than 100,000 kWh
• annual gas consumption of no more than 293,000 kWh

Many pubs, salons, small workshops, single-site retailers and independent care providers qualify. Many do not realise it.

What the route covers

Suppliers must be members of a redress scheme, which in practice means the Energy Ombudsman. Since brokers arranging contracts for microbusinesses fall within the scope of supplier-facing rules on broker complaints, a microbusiness can raise a complaint with its supplier about how the contract was sold, including commission that was never disclosed, and escalate to the Ombudsman if it is not resolved within the supplier's complaints timescale.

It costs nothing. The Ombudsman can direct an apology, an explanation, a practical remedy, and a financial award.

Where it falls short

Three limits matter:

1. Award levels. Ombudsman awards are capped, and the cap is far below what a multi-year commission uplift on a substantial supply can amount to. For a business with a large annual consumption, the gap between an Ombudsman award and the actual loss can be considerable.
2. Scope. The scheme is for microbusinesses. If your consumption or headcount puts you outside the definition, this route is closed and a civil claim is the option.
3. Broker insolvency and complexity. Where the broker has dissolved, where several contracts and several suppliers are involved, or where the arrangement is genuinely contested, the Ombudsman is not well suited to unpicking it.

Choosing between them

If you are a microbusiness with a single contract and a modest sum at stake, start with your supplier's complaints process. It is free, and you do not need us or anyone else to do it.

If the sums are larger, if there are several contracts across several years, or if you have already been through the complaints process without getting anywhere, a civil claim is the realistic route. You are entitled to pursue one yourself. Most businesses do not, because the evidence-gathering is time-consuming and the other side is legally represented.