Contractual rights are property rights: Government blunder on feed-in tariffs

The UK Government faces a bill for up to £200m in compensation to green energy installers that suffered losses as a result of former energy secretary Chris Huhne’s 2011 announcement on proposed cuts in environmental subsidies. The announcement led to many organisations and individuals dropping plans to install solar power with feed-in tariff (FIT) equipment that feeds electricity generated by small-scale solar panel systems into the grid, producing a payment.

A legal ruling in the High Court (Breyer Group plc & Others v DECC issued 9 July 2014 ) is the second time in a week that the government has been show to have fallen foul of the principle that the law should not be retrospectively changed if it damages people’s interests. (See the Poundland case: UK Human Rights Blog)

Are contracts property?
The High Court established in its ruling on preliminary legal issues that pre-existing contracts to supply the solar micro-generation equipment constitute “property” for the purposes of protection of property rights under the European Convention on Human Rights. Furthermore, Huhne’s announcement, which proposed bringing forward a reduction of the subsidised payment, constituted an “interference” with those property rights. This should potentially be compensated, said Mr Justice Coulson.

The 31 October 2011 announcement that cuts in the feed-in payment might be brought forward amounted to a retrospective change in legislation without passing new legislation through Parliament. “The proposal would have taken away existing entitlements without statutory authority.” The announcement damaged businesses and hit consumers who had planned to install the equipment on the basis of the higher payments. As such it breached ECHR Article 1 Protocol 1 (A1P1) on protection of property rights regarding contracts concluded on or before the day of the announcement.

Vicky Pryce is innocent, OK

If we had had a rather more robust jury in the second Vicky Pryce trial, some pertinent questions might have been put to the judge.

For example: “Why do we have to sit and watch a chap in a funny wig constantly slagging off that poor woman over there?”

Or: “Why did he tell us that we weren’t going to hear evidence from a lady we’ve never heard of, was never mentioned in the first trial and who anyway doesn’t seem to have had any role in Ms Pryce taking driving penalty points for her husband, Chris Huhne?”

Or: “Given the offence took place 10 years ago and the issue was what happened on the fatal day when Pryce was persuaded to take the speeding points,  why did we have to listen to all that scuttlebutt from years later about Huhne’s affair, his relationship with his kids, Pryce’s relationship with journalists, her abortion – all of which is properly the province of the Sun and the Mail, which we can read in our leisure time?”

Or: “Given Chris Huhne has admitted the offence, was the beneficiary of the offence, and was clearly the mastermind behind the offence, why are we wasting vast thousands of public money (and our time as jurors) trying to pin it on his wife as well?”

Some of the answers are clear enough. Take the first and third questions. The denigration of Vicky Pryce by the prosecuting barrister and the consequent examination of how a “woman scorned” sought revenge for the break-up of her marriage years later arose out of the nature of her defence. She pleaded marital coercion – that she was forced or obliged to take the then MEP and rising Liberal Democrat star’s penalty points for him.