High Court dismisses Npower’s switching trial judicial review

The High Court has dismissed Npower’s claim for a judicial review into the collective switching trial that Ofgem ordered the big six energy supplier to take part in.

Npower said it is disappointed by today’s (21 December) ruling and has separately called on the regulator to explain what its intentions are for the future of collective switch trials.

In his ruling, Mr Justice Freedman said he rejected each of the grounds on which Npower had mounted its “substantive attack” and he “accepted substantially” the arguments of Ofgem.

The regulator issued a provisional order to Npower on 24 September after the supplier had “refused to fully comply”.

Ofgem ordered the energy provider to allow 100,000 of its customers to join a larger collective switching trial.

In October, Utility Week revealed that Npower was continuing with its application for a “fuller” court hearing to address “important issues” raised by Ofgem’s collective switching trial process.

Responding to the High Court judgement, a spokesperson for Npower, said: “We’re disappointed by today’s ruling. Our action wasn’t about objecting to trials that are intended to test customer engagement in the energy market.

“We believed that Ofgem had failed to take proper account of the price cap and the impact of the trial on Npower and this was why we took the unprecedented step of taking them to court.

“Based on Ofgem’s own internal considerations, we still believe that Ofgem was wrong to launch this trial so close to the start of the price cap and we still remain unsatisfied with the clarity of reasons given for carrying out a trial of this size, at this time.”

The spokesperson added: “Separately, from today’s ruling, we call on Ofgem to now explain to the industry what its intentions are for the future of collective switch trials and to enter into consultation and proper trialling, considering that the CMA [Competition and Markets Authority] raised a number of questions about the long term merit of collective switch schemes.

“Although we’ve been frustrated by this process, our aim will always be to work constructively with Ofgem in the future.”

Ofgem said it welcomed the High Court’s decision to dismiss Npower’s claim for a judicial review.

“Our consumer engagement trials are testing ways to help consumers on poor value standard variable tariffs to find cheaper deals,” the regulator said.

Ofgem confirmed the provisional order on Npower on 26 November, with the modification set out in the notice of 31 October, when the regulator announced it intended to confirm the order.

The regulator had been in discussion with Npower about the company’s compliance with obligations under standard conditions in its supplier licence.

Ofgem said Npower’s refusal to participate in the “active choice collective switch autumn trial” was cause for concern and led to a provisional order being issued.

Npower expressed disappointment at the time the provisional order was announced and said that at the “final hour” it had not been able to agree some “detailed points” with Ofgem.

The supplier claimed it was ready to undertake a collective switch trial of 50,000 customers but that was delayed because of the provisional order.

The switching trial is a “flagship” Ofgem policy in response to the recommendations made by the CMA following its investigation into the energy market between 2014 and 2016.

Ofgem introduced powers to oblige suppliers to participate in its consumer engagement trials after the investigation.

Ofgem ran its first trial of a simplified collective switch involving 50,000 customers from Scottish Power earlier this year.

More than 20 per cent of consumers included in the trial switched suppliers, according to Ofgem.