CM September 2021

LEGAL MATTERS
LIGHT PERPETUAL
The Human Rights Act has limitations, especially
when it comes to subsidies on solar panels!
AUTHOR – Peter Walker
The scheme had been introduced earlier in April 2010,
and it was intended to encourage the production of low
carbon electricity by specified technology including
solar PV generators.
churches’ could
result in solar panels
on the roofs of
medieval churches, so
Churchwardens and
‘ECO
vicars will have to deal
with procedures, paperwork, and finding
the money to pay for the projects. In
the Church of England that will include
an application for what is known as a
‘faculty’, i.e. diocesan permission, for
the installation, but there will also be a
contract to do the work. That should not
result in a concern about human rights,
but they were important to the judges of
the Court of Appeal in the case Solaria
Energy UK Ltd v Department for Business,
Energy and Industrial Strategy (2021)
1 WLR 2349.
The source of the dispute was a
proposal by the Department’s predecessor,
the Department of Energy and Climate
Change. On 31 October 2011 it proposed
to bring forward a qualifying date for the
feed-in tariff scheme affecting the supply
of solar panels or solar photovoltaic (solar
PV) generators. The scheme had been
introduced earlier in April 2010, and it
was intended to encourage the production
of low carbon electricity by specified
technology including solar PV generators.
This was the Feed-in-Tariffs (FIT)
scheme intended to benefit operators of
small-scale low carbon generators, but
the proposals made significant changes to
the original scheme. This resulted in the
case Friends of the Earth v Department of
Energy and Climate Change (2012) EWCA
Civ 28 also involving judges of the Court of
Appeal. They concluded that the proposal
was unlawful, because the Department
had no power under the relevant statute to
make retrospective delegated legislation.
The Department had proposed a
new qualification date and a subsidy
for each kilowatt hour over 25 years.
The Department wanted a change in
the rate, so from May 2012 it would be a
lower kilowatt hourly rate for the rest of
the 25-year period. Suppliers which had
already entered into contracts on the
more generous basis faced substantial
losses. Some installations would not be
completed by the new qualifying date.
This proposal and subsequent litigation
would affect a contract involving the
claimant in the Solaria Energy case.
UNLAWFUL PROPOSALS
This situation, particularly the Friends
of the Earth case, gave rise to a new case
eventually to be heard by the judges of
the Court of Appeal in Breyer Group plc
v Department for Energy and Climate
Change [2016] 2 All ER 220. In the lower
High Court earlier Coulson J had referred
to a Government Consultation paper
pointing out that some organisations had
‘easy access to up-front, low-cost capital
…’ This analysis prompted the proposed
changes eventually resulting in the Breyer
Group case. Various suppliers commenced
litigation against the Department, and
their claims were based on ‘A1P1 ECHR’.
This is jargon for Article 1 of the First
Protocol of the European Convention on
Human Rights. It provides, ‘Every natural
or legal person is entitled to the peaceful
enjoyment of his possessions. No one
shall be deprived of his possessions except
in the public interest and subject to the
conditions provided for by law and by the
general principles of international law.’
The State was given powers to interfere in
limited circumstances. These provisions
and the Convention generally have been
incorporated into law in the UK by the
Human Rights Act 1998.
In the light of these provisions the
claimants alleged that they had possession
rights in an enforceable legitimate
expectation concerning the timing of the
rates payable, the marketable goodwill,
the signed contracts agreeing the FIT
payments and much more. The judges
would consider whether the Department
had unjustifiably interfered with these
alleged A1P1 possessions, and if any
damages would be awarded.
Coulson J approved Levison J’s
statement in Murungaru v Secretary of
State for the Home Department (2008)
EWCA Civ 1015 that a contractual right
could be such a right in possession.
That would include signed and perhaps
part-performed contracts, but not to
those which were unsigned. Loss of
future income was similarly excluded,
but goodwill could be a possession for
the purposes of the Convention. The
exceptions would eliminate many of the
claims.
As for the proposal itself the defendant
had acted unlawfully. The consultation
document and written ministerial
statement was an unlawful act of
interference. The possessions included
those contracts concluded before 31
October 2011, which could not, for
example, proceed as planned.
Advancing the credit profession / www.cicm.com / September 2021 / PAGE 34