REAL Conduct Changes Under Legal Microscope
The Office of Fair Trading (OFT) has found itself under increasing pressure to urgently withdraw the Renewable Energy Assurance Scheme's (REAL) code of conduct, following concerns the REAL Code is unlawful. Putting into question the authority of REAL, the organisation recently appointed to oversee delivery of the Green Deal, Prospect Law, acting for Crystal Windows and Doors Limited, claims that REAL changed crucial parts of its code of conduct without prior approval by the OFT. Furthermore, Prospect Law claims that when the OFT retrospectively approved REAL's Code, the process itself was unlawful.
REAL was issued with a High Court Claim on 3rd July for acting beyond its powers and unfairly towards its Members, and for unlawfully altering the REAL Code without obtaining prior OFT approva
Notably, one of the clauses removed from the REAL Code was the requirement to act "quickly and fairly" with regards to complaints towards its Members. The requirement to act fairly is a key principle set out in the OFT's own guidance for approving consumer codes, including the REAL Code.
John Oddi, MD, Crystal Windows and Doors said, "REAL's conduct has now been put well and truly under the spotlight. Earlier this month Crystal issued a claim against REAL as we believed the organisation was acting well beyond its powers, and this new evidence proves our point entirely. Whilst REAL says Crystal is attacking the Code, it's quite the opposite: it is REAL which has been operating an unlawful Code without obtaining OFT approval. Bearing in mind the fact that the OFT itself says ""¦industry bodies play an important role in facilitating competition and have obligations to ensure that firms are treated without bias" REAL's conduct appears totally unacceptable and to fly in the face of the OFT's own rules. It's a total shambles and Crystal is taking Court action against REAL to try to set things right."
A spokesperson from Prospect Law said, "On 18th June, REAL altered the Code under which it operates in a number of fundamental respects. These alterations included the removal of the requirement to act "quickly and fairly" in relation to complaints against Member firms. The alterations to the Code by REAL required prior approval from the OFT. This prior approval was not obtained. Instead, on 12th July, over a week after Crystal launched High Court proceedings against REAL asking for a declaration to be made that the altered Code was unlawful, the OFT retrospectively "approved" the code."
"Prospect Law has now written to the OFT pointing out that this decision is itself unlawful. We have alerted the OFT to the serious concern the current situation is starting to cause amongst Members of REAL and indeed consumers who are asking us: how can we have faith in REAL's conduct or authority when the altered Code under which it operates has itself been unlawfully introduced? Prospect Law has asked REAL to withdraw the altered Code with immediate effect. REAL has refused this request and we have now asked the OFT to step in and force REAL to withdraw the unlawfully altered Code with immediate effect."
A Letter Before Claim has been issued to the OFT asking them to act or face Judicial Review proceedings. Resolution of REAL's conduct in relation to the altered Code is vital for the confidence of the renewable energy industry and its customers, who are growing increasingly concerned about the legitimacy of the regulatory system and looking for reassurance as the industry grows.
