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Solar PV damages claim rises to £50 million

A further five solar firms issue Letter Before Claim to DECC

Monday 22nd October 2012: Prospect Law, the legal team that defeated the Government over the illegal cuts to Feed-in tariffs last year, has issued the Department of Energy and Climate Change(DECC) with a formal ‘Letter Before Claim’ on behalf of a further five solar installation and construction companies. The request brings the total demand for compensation of losses incurred by the unlawful cuts to approximately £50 million, up from the initial demand of £2.2 million made in July. More firms are expected to file proceedings through Prospect Law within the next few days.

The companies now calling for damages join Solar Power PV Ltd; Crystal Windows and Doors Ltd; and Solarlec PV Solutions Ltd which have had claims lodged at the High Court since the end of August following DECC’s earlier refusal to accept liability for their losses. Prospect Law will now issue a claim on behalf of all the new claimant firms and then join these to the original claim.

Companies looking to join the damages claim have until 31st October 2012 to do so before the limitation period for making a damages claim against DECC closes, the cut-off point marked by the first anniversary of the release of the original Ministerial Announcement by Greg Barker MP.

Simon Gillett, CEO of E-tricity, one of the new claimant firms, said:

“Sadly, the damage that the Government’s unlawful conduct caused the Solar PV industry was very serious indeed. The Ministerial Announcement at the end of October 2011 put a great deal of pressure on both the business and its employees, forcing us to make drastic cut-backs and cost reductions wherever possible. We are one of the lucky few that have been able to keep our business moving, but the reality is that the way in which DECC attempted to introduce these cuts to FITS rates caused our business and the industry significant damage and loss. By issuing a Letter Before Claim today we are requesting that the government acknowledges the losses it caused, and takes the appropriate action to compensate us.

A spokesperson from Prospect Law added:

“The 2008 Energy Act and the regulatory regime which introduced the Feed-in Tariff provided an effective set of rules for delivering the UK’s clean energy future. The way in which DECC administered this positive framework for solar PV created a “legitimate expectation” under which both the public and industry could operate. The premature and unlawful cuts, announced by the Minister on 31st October last year, ignored the Government’s own policy framework.”

“By casting aside the rules under which the solar industry operated, the Government caused major financial losses and materially harmed the confidence of both consumers and the industry. Solar is a robust industry, and one the public wants, but significant damage has been done to the sector. By issuing court action these claimant firms are asking the High Court to ensure that the Government is obliged to act responsibly, face up to its unlawful conduct and the damage this caused and is ordered to pay compensation.”

The organisations claim that the cuts to the Feed-in Tariff, which were ruled ‘unlawful and unfair’ by the High Court, Court of Appeal and Supreme Court in Spring 2012, directly caused damage to Solar installation businesses. The landmark case this year confirmed that a fair and consistent legislative and regulatory framework is vital to encourage long term investment in clean energy from consumers and businesses alike.

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