May-Lean & Company Ltd v The Gas and Electricity Markets Authority The Secretary of State for Communities and Local Government and Another (Interested Parties)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Dove |
| Judgment Date | 15 September 2017 |
| Neutral Citation | [2017] EWHC 2307 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 15 September 2017 |
| Docket Number | Case No: CO/3706/2016 |
[2017] EWHC 2307 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Dove
Case No: CO/3706/2016
and
and
Jason Coppel QC (instructed by Hill Dickinson) for the Claimant
Alan Bates (instructed by Ofgem Legal Services) for the Defendant
Mark Westmoreland-Smith (instructed by the Government Legal Department) for the First Interested Party
Tim Ward QC (instructed by Towerhouse LLP) for the Second Interested Party
Hearing date: 18 July 2017
Introduction
The Defendant has the responsibility for administering and policing a mandatory system known as "ECO 2" by which energy suppliers (including, for instance, the Second Interested Party) are each obliged to achieve targets for reducing carbon dioxide emissions and consumers' energy bills through measures that include the installation of energy efficiency measures in peoples' homes. One of these measures is the installation of loft insulation. The Claimant is the manufacturer of a bespoke product known as "HatchThatch", invented by Mr Shaun Grimes, which is designed to form part of a loft insulation installation and specifically provides insulation for the loft hatch cover or door within the ceiling of the home being insulated. The First Interested Party has an interest in the proceedings as issues were raised in relation to the interpretation and application of the Building Regulations 2010 ("the Building Regulations") for which the First Interested Party is responsible.
It is sensible at the start of this judgment to set out the regulatory regime which applies to the ECO 2 scheme. Following this, it is necessary to set out some of the background facts relevant to the dispute. The Claimant's contentions on the merits will then be examined. There are subsidiary issues in relation to delay and discretion in respect of the grant of relief which arise in the event that the Claimant's submissions on the merits are accepted.
The ECO 2 Scheme
The ECO 2 scheme was created by the Electricity and Gas (Energy Company Obligation) Order 2014. By virtue of article 3(1A) a carbon emissions reduction target and a home heating costs reduction targets are established for the period from 1 April 2015 to 30 September 2018. The defendant, who is described as the administrator within the terms of the 2014 order, is obliged to ensure that the obligations placed on suppliers under the order equal their overall carbon emissions reduction target. A similar obligation exists in relation to the overall home heating costs reduction target. Also relevant to the claim is a further obligation that was imposed on energy suppliers, namely a carbon saving community obligation, but the obligation period in relation to that obligation came to an end on 31 March 2017. Article 12 explains how the carbon emissions reductions obligation is to be met. It provides as follows:
" 12. Achievement of carbon emissions reduction obligation
(1) A supplier must achieve its total carbon emissions reduction obligation by no later than 30 September 2018.
(2) A supplier must –
(a) achieve its total carbon emissions reduction obligation by promoting carbon qualifying actions …
[…]
(3) A carbon qualifying action is the installation, at domestic premises, of a measure which is –
(a) a primary measure or, subject to paragraph (4), a secondary measure;
(b) installed on or after 1 st April 2015 and in accordance with the Publicly Available Specification, where the installation is referred to in the Specification …"
Each supplier is required to notify the Defendant of each qualifying action completed month by month as a consequence of article 17 of the 2014 order. The 2014 order then, under the provisions made in articles 25, 31 and 32, has a scheme for attributing carbon savings or cost scores to qualifying actions which are notified under article 17, and then providing that information to suppliers and the Secretary of State.
As set out above, article 12(3)(b) requires a carbon qualifying action to be installed "in accordance with the Publicly Available Specification". For these purposes, the Publicly Available Specification is the document entitled "Publicly Available Specification 2030: 2014 edition 1: Improving the Energy Efficiency of Existing Buildings" ("PAS 2030"). The installation of loft insulation is dealt with by PAS 2030, insofar as relevant to the present claim, as follows:
" B9 Measure BFM.9 Loft Insulation
B9.1 Additional installation requirements
When installing loft insulation, in addition to meeting the core requirements set out in Clauses 4 to 7 of this PAS, the installer shall also work to any standards, specifications, instructions or guidance identified in B9-I1 of Table B9.
[…]
B9-I1 – Additional installation requirements to those in the core of this PAS (Clauses 4–7)
As required in Clause 4.4, the methods used for the installation of loft insulation products or systems shall be as specified by the supplier, where provided.
Where relevant to the type of installation being undertaken, the requirements or guidance given in "General requirements and guidance for the installation of cold roof loft insulation (see 8.7)."
Reference to paragraph 8.7 of PAS 2030 will be noted within the text of the requirements above. Paragraph 8.7 provides as follows:
" 8.7 CITB
General requirements and guidance for the installation of cold roof loft insulation"
The effect of PAS 2030 is, therefore, to incorporate the document published by the Construction Industry Training Board ("CITB") in September 2013 "General requirements and guidance for the installation of cold roof loft insulation" ("the CITB Requirements Guidance") into the PAS requirements. The relevant parts of the CITB general requirements and guidance are as follows:
" 2: General requirements and guidance
2.1 All installers contracted to perform loft insulation works shall:
[…]
(f) ensure that all legal and statutory obligations, in relation to the work, are met.
[…]
3: Materials and Products
[…]
3.2 Approval
All materials and products used shall be approved by the relevant authority and covered by the relevant industry standards (BS or EN, where available) or UKAS-accredited third party certification.
3.3 Suitable materials and products for loft insulation (informative)
The following list is non-exclusive, other materials and systems may be used if they comply with clauses 3.1 and 3.2. The industry standards governing these materials are listed in Appendix 2: Index of Industry Standards. (Please refer to the manufacturer's website for specific data sheets).
— Mineral wool rolls and slabs
— Blown mineral fibre granules or pellets
— Blown cellulose fibre
— Wool-based batts
— Spray applied rigid closed-cell polyurethane (PUR) insulation
— Rigid foam board
— Pipe and tank insulation
[…]
4: Scope and extent
4.1 Coverage
The insulation works shall cover the entire loft space, including all tanks and pipes, unless there is a compelling reason, which must be documented (see clause 5.7.6)
[…]
5.4 Insulation and draught-proofing of loft hatches
5.4.1 Required level of insulation
The loft hatch cover shall be completely insulated, as far as practical, to at least the same U-Value degree as the rest of the roof space. As a minimum, the requirements of the current building regulations/standards shall apply.
5.4.2 Suitable methods of insulating and draught-proofing Loft hatches
Loft hatches should be insulated and draught-proofed in accordance with the insulation material's specifications or manufacturer's instructions.
5.4.3 Special requirement for blown fibrous materials
In the case of blown fibrous materials, a suitable barrier shall be provided around the loft hatch to ensure that the insulating material does not ingress into the dwelling when the loft hatch cover is opened (in line with applicable industry standards)."
The defendant publishes Delivery Guidance in relation to the ECO 2 scheme. The Guidance provides as follows, in relation to the applicable standards:
" Standards relating to the installation of ECO measures
2.27. Suppliers should ensure that the installation of a measure is carried out in accordance with the relevant standards. How this is demonstrated will vary depending on whether or not the measure is referred to in the Publicly Available Specification 2030:2014 Edition 1 ("PAS").
2.28. If a measure is referred to in PAS, the installation of the measure must be carried out in accordance with the provisions of PAS, building regulations and any other regulations that relate to the installation of the measure.
2.29. If a measure is not referred to in PAS, the installation of that measure must be carried out in accordance with building regulations and any other regulations that relate to the installation of the measure.
Demonstrating compliance with PAS
2.30. Compliance with the provisions of PAS can be demonstrated where the installation is carried out by a PAS-certified installer. Installers can be certified by independent third parties according to the requirements of Publicly Available Specification 2031:2015.
2.31. Suppliers should contact us directly to discuss alternative methods for demonstrating compliance with PAS if the installation is not carried out by a certified installer. Should a supplier use an alternative method, we may also require additional monitoring."
The Delivery Guidance also makes provision for a percentage of a measure which must be installed in the following terms:
" Percentage of a measure that must be installed
2.38. Suppliers must install...
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