Raft of top firms appointed by big six energy companies over market reforms

Seven law firms have won mandates advising the big six UK energy suppliers on regulator plans to force them to cut energy prices for millions of customers.

The proposals were unveiled in a damning report by the Competition and Markets Authority (CMA) following a year-long investigation, which found that energy companies were overcharging customers who failed to switch suppliers.

Three magic circle firms secured lead adviser roles.

Linklaters is acting for Centrica, the parent company of British Gas, with a team led by antitrust partner Michael Cutting, the former global head of competition.

Freshfields Bruckhaus Deringer is advising SSE with a team headed by competition partner Deirdre Trapp.

Allen & Overy has joined forces with Scottish firm Shepherd and Wedderburn to represent ScottishPower.

Pinsent Masons is advising E.ON, reinforcing its status as the energy supplier’s effective sole legal adviser. Guy Lougher, head of EU & Competition, will be leading the team alongside partner Giles Warrington.

RWE npower is being advised by Eversheds. The firm’s team will be overseen by competition partner Adam Collinson and UK competition head Ros Kellaway.

EDF is being advised by Baker & McKenzie.

The CMA report found that, between 2009 and 2013, the big six collectively offered average prices that were 5% above the competitive level, which amounted to the overcharging of domestic households by £1.2bn a year.

Roger Witcomb, chairman of the energy market investigation, said millions of customers were paying too much for their energy.

He said: “While competition is delivering benefits to increasing numbers of customers, mainly through the growth of smaller suppliers with cheaper fixed-price deals, the majority of us are still on more expensive default tariffs.

“Many customers do not shop around to see if there’s a better deal out there – let alone switch. The confusing way energy is measured and billed can make comparing deals understandably daunting.”

The CMA’s plans to reform the market include a raft of regulatory changes and a transitional price cap that would likely see 70% of consumers receiving a cut in their energy bills.

However, the CMA found that there was no negative impact on competition from companies operating in both the wholesale and retail markets, as many of the big six do, allaying fears that energy companies would have to be broken up.

The report rejected suggestions of a return to the previous system of the wholesale energy market.