Energy Ombudsman Business Case Outcomes UK: What Microbusinesses Have Won

What the Energy Ombudsman Can and Cannot Do

The Energy Ombudsman, operated by Ombudsman Services, provides independent dispute resolution for energy complaints. From December 2024, the Energy Ombudsman's business jurisdiction was expanded by the Gas and Electricity Regulated Providers (Redress Scheme) (Amendment) Order 2024 to cover two separate categories: microbusinesses as defined by Ofgem under SLC 7A (fewer than 10 employees, or below the consumption or turnover thresholds in the licence definition), AND a new small business category covering businesses with fewer than 50 employees, an annual turnover of at most £6.5 million or a balance sheet total of £5.0 million, and consumption levels below specified thresholds. Together these definitions extend access to around 99% of UK businesses.

The service is free to the complainant. There is no charge to the business for submitting or pursuing a complaint through the Ombudsman. The Ombudsman's decisions, where upheld, are binding on the supplier: the supplier must implement the remedy directed. The business is not bound by the Ombudsman's decision and may reject it and pursue other routes, including court, if it considers the remedy inadequate.

The Ombudsman cannot handle complaints against energy brokers directly. Broker conduct, including mis-sold contracts and undisclosed commissions, is not within the Ombudsman's direct jurisdiction as it applies to brokers. The Ombudsman can consider complaints against the supplier arising from the supply contract, including where the supplier's conduct in connection with a broker arrangement is itself the issue, but cannot make orders against the broker as a separate party.

The Ombudsman cannot handle complaints from businesses above the microbusiness threshold. Larger businesses in dispute with their supplier must rely on the supplier's internal complaints process, industry codes, Ofgem, or civil litigation as applicable.

Prerequisites: The Internal Complaints Process

Before the Ombudsman will accept a referral, the business must have completed the supplier's internal complaints process. This means the complaint must have been raised formally with the supplier, and either a final response received or eight weeks elapsed without a satisfactory resolution. A deadlock letter from the supplier, confirming that the internal process is exhausted without agreement, is the clearest trigger for Ombudsman referral.

The eight-week clock starts from the date the formal complaint was raised, not from any initial informal contact. A business that has been in informal correspondence with a supplier about a billing dispute without formally lodging a complaint has not yet started the eight-week period. Submitting a formal complaint in writing, using the supplier's published complaints procedure, and keeping a dated record of the submission is essential.

Once the internal process is complete, the business has 12 months from the date of the final response or deadlock letter to refer the complaint to the Ombudsman. Referrals outside this window may not be accepted.

Complaint Types and the Ombudsman's Caseload

Ombudsman Services publishes annual reports covering complaint volumes and outcomes across its energy scheme. These reports provide an accurate picture of the types of complaints handled and the remedies awarded without reference to individual case specifics that cannot be independently verified.

Billing disputes consistently represent the largest category of energy complaints handled by the Ombudsman, including overcharging, incorrect meter reads, disputed standing charges, and direct debit management failures. Switching problems form the second major category, including delays, failed switches, and debt blocks applied improperly. Contract disputes, including exit fee disputes, rollover contract challenges, and contract terms disagreements, are also regularly handled. Customer service failures, including complaints about communication, complaint handling timescales, and failure to provide required information, form a consistent fourth category.

For microbusinesses specifically, the Ombudsman has handled complaints relating to deemed contract rates applied without adequate communication, mis-selling via brokers that gave rise to supply contract complaints, back-billing in excess of permitted limits, and incorrect disconnection or threatened disconnection.

Remedies the Ombudsman Can Award

The Ombudsman can direct a range of remedies where a complaint is upheld. These include:

• Financial refund: A refund of overcharged amounts, calculated on the basis of the evidence presented. This is the most common financial remedy in billing and overcharging cases.
• Goodwill payment or compensation: A payment in recognition of inconvenience, distress, or time lost in resolving the complaint. Amounts vary by the severity of the supplier's conduct and the impact on the business.
• Contract release: Direction to the supplier to release the business from a contract without the exit fee that would otherwise apply. This is available in cases where the contract was mis-sold or where the supplier's conduct has materially breached its obligations.
• Exit fee waiver: Specific waiver of an exit fee, as distinct from full contract release, in cases where the fee is disputed or was applied improperly.
• Formal written apology: A written apology from the supplier acknowledging the complaint and its outcome. This is a standard element of many upheld complaint decisions.
• Corrective action: Direction to the supplier to take a specific action, such as issuing a corrected bill, restoring supply, or updating the account records.

The Financial Award Cap

The Ombudsman's financial awards are subject to a maximum cap. Ombudsman Services publishes the current cap in its scheme rules on its website. Businesses with disputes where the financial loss exceeds the cap will have the capped award available through the Ombudsman route, with the balance of any claim requiring pursuit through the courts if not agreed with the supplier separately.

In practice, many microbusiness energy disputes involve sums within the Ombudsman's cap, making the Ombudsman route sufficient to achieve full financial recovery without litigation. Where the dispute involves a significantly larger sum, legal advice on whether to use the Ombudsman in parallel with or instead of a court claim is recommended.

The cap applies to the total financial award, including both refunds of overpayments and any goodwill or compensation element. Non-financial remedies such as apologies, corrective actions, and contract releases are not subject to the financial cap and can be directed regardless of the monetary value of the dispute.

The Limits of Ombudsman Jurisdiction on Broker Conduct

A recurring frustration for microbusinesses is the gap in redress coverage for energy broker conduct. Where a broker has mis-sold a contract, failed to disclose commission, or given advice that resulted in the business signing an unsuitable long-term contract, the Ombudsman cannot make a binding order against the broker directly.

The Ombudsman's jurisdiction runs against the licensed energy supplier as the contracting party. Complaints about the supply contract itself, including its terms, the rate applied, or the exit fee, can be considered. But the broker's separate conduct in arranging the contract is outside the scope of a supply contract dispute with the supplier.

Ofgem is working on extending redress coverage to energy brokers, and has consulted on mandatory ADR (alternative dispute resolution) requirements for TPIs. Until such requirements are in force, the primary routes for broker conduct complaints are the broker's internal complaints process, any voluntary ADR scheme the broker belongs to, and civil litigation. The dedicated guide at /mis-sold-business-energy-claim-uk/ covers the broker mis-selling route in more detail.

Frequently asked questions

Editorial disclaimer: The following questions address common points of uncertainty about using the Energy Ombudsman for business disputes. They do not constitute legal advice. Businesses considering an Ombudsman referral should review the eligibility criteria and process on the Ombudsman Services website directly.

Is the Energy Ombudsman free for business customers?

Yes. Ombudsman Services' energy scheme is free to the business complainant. There is no charge for submitting a complaint, pursuing an investigation, or receiving a decision. The Ombudsman is funded by the energy suppliers who are members of the scheme. If a complaint is upheld, the supplier is required to implement the directed remedy. The business may reject the Ombudsman's decision if it considers the remedy insufficient and pursue other routes including court action.

Which businesses qualify to use the Energy Ombudsman?

From December 2024, the Energy Ombudsman's business scheme covers two categories. The first is the existing Ofgem microbusiness definition (fewer than 10 employees, or below the SLC 7A consumption or turnover thresholds). The second is the new small business definition introduced by the Gas and Electricity Regulated Providers (Redress Scheme) (Amendment) Order 2024: businesses with fewer than 50 employees, an annual turnover of at most £6.5 million or balance sheet of £5.0 million, and consumption below the specified thresholds. Businesses above all of these criteria cannot use the Ombudsman and must pursue disputes through other routes including Ofgem complaints, industry code processes, or civil litigation.

What can the Ombudsman actually make a supplier do?

Where a complaint is upheld, the Ombudsman can direct the supplier to: issue a financial refund for overcharged amounts; pay goodwill compensation for inconvenience or distress; release the business from a contract without exit fees; waive a specific disputed exit fee; issue a formal written apology; and take specific corrective actions such as correcting billing records or restoring supply. Financial awards are subject to a published maximum cap. Non-financial remedies are not subject to the cap.

Can the Ombudsman help with a complaint about my energy broker?

Not directly. The Ombudsman's jurisdiction covers licensed energy suppliers, not brokers as separate parties. A complaint about the supply contract arising from the broker's involvement can be considered if the supplier's conduct is the issue. The broker's own conduct, including undisclosed commissions or mis-selling, cannot be the subject of an Ombudsman order against the broker. Ofgem has consulted on extending mandatory ADR to brokers but this has not yet come into force. The mis-sold business energy guide at /mis-sold-business-energy-claim-uk/ covers the available routes for broker conduct complaints.

What if the Ombudsman's decision does not cover my full financial loss?

The Ombudsman's financial award is capped at a published maximum. If the full loss exceeds the cap, the Ombudsman can still direct a capped award plus non-financial remedies. The balance above the cap is not extinguished and can be pursued through the courts if the supplier does not agree to pay it separately. For disputes involving large sums, legal advice on whether to use the Ombudsman route alongside a court claim, or to proceed directly to court, is recommended.

How we verified this

This article draws on Ombudsman Services' published annual reports and scheme documentation as available on ombudsman-services.org, Ofgem's published guidance on microbusiness energy rights and the route to the Ombudsman, and Citizens Advice guidance on making an energy complaint. Complaint category descriptions and remedy types are drawn from Ombudsman Services' published scheme rules and annual reports rather than from individual case details.

Sources

• Ombudsman Services - Energy scheme guidance and annual reports
• Ofgem - Microbusiness consumer protections and Ombudsman route
• Citizens Advice - Making an energy complaint
• Ofgem - Third Party Intermediaries and redress

For related reading on the complaints process and consumer rights, see Business Energy Complaint Process UK and Microbusiness Energy Rights UK.