- Can a gas supplier send you a bill about 4 years after you stopped using them?
- Can a supplier suddenly increase his price during the course of a fixed priced contract?
- Contractual dispute at time of changing gas suppliers
About 4 years after they had switched gas supplier at one of their main sites, our client was surprised to receive an invoice from one of the UK’s largest energy providers demanding more than £43,500.
The bill was raised as a result of external consultants claiming that the bills for that site had been incorrectly calculated, hence undercharged, for the period from November 2000 until October 2003. The consultants sought the “outstanding balance” from our client.
The client asked Business Cost Consultants to investigate and manage the issue. We gathered all relevant information, data and correspondence and analysed it thoroughly. We then built a case for the client and dealt with the supplier’s consultant, on behalf of our client. During the process we liaised closely with the Finance Director and his legal advisors.
Following several weeks of negotiation, the balance was reduced by more than 80% to around £7,800. The client was very happy with the full and final settlement. That was a saving of £35,700.
As part of our service to clients we carefully vet supply contracts. We ensure that a fixed priced contract is just that. We ask suppliers to remove clauses which give them the right to increase prices whenever the price of gas moves significantly higher in the markets.
Six of our clients called us to tell us of their concerns that one gas supplier had written to them to announce that within a month they were increasing the price of their gas by about 60%. We told our clients not to worry and took up their cases with the supplier.
We pointed out that the normal clause which allows them to increase their prices had been taken out of all of our clients’ contracts at our insistence, before we recommended that our clients sign them. The supplier eventually acknowledged that we were correct. He then switched his argument by arguing that the clause concerning “force majeure” was being invoked to justify their huge increase in gas prices.
Working with our lawyers we were able to point out that the “force majeure” clause was meant to deal with situations where a supplier was affected by insurrection, civil disorder, terrorism and the like. We successfully argued that as experts in their field they should have planned for price rises. Price rises and falls are part of the business of a gas supplier and hence cannot be regarded as unforeseeable or totally beyond their control.
Whilst thousands of organisations throughout the UK had to accept the huge price rises, our clients continued with their fixed priced contracts until the end dates written into their contracts.
It had been agreed that one gas company, Supplier A, would cease supplying gas on an agreed date and Supplier B would take over on the same date. Unfortunately, Supplier B made an administration error when trying to register the new supply and, consequently, the transfer did not take place on the agreed date. Supplier A then applied “out of contract” rates for several months until the supply was correctly transferred to Supplier B.
When Business Cost Consultants took on the case, we gathered all relevant communications between the client and the supplier and presented a robust case outlining the reasons why Supplier B was at fault. We pursued the supplier for several months, saving the client considerable time and frustration and the supplier eventually credited the client’s account with an amount equivalent to 22% of their then annual spend.