Successful A1P1 claims by photovoltaics

13 July 2014 by

Breyer Group plc and others v Department of Energy and Climate Change [2014] EWHC 2257 (QB) – Coulson J read judgment 

This is an important judgment on governmental liability for a rather shabby retrospective change of the rules about subsidies for photovoltaic schemes. The Court of Appeal had decided in 2012 that the changes were unlawful: see judgment  and my post here.  The question in Breyer was whether businesses could obtain damages under A1P1 arising out of the Secretary of State’s decision. Though the judgment proceeds on a number of assumed facts, some critical findings of law were in favour of the businesses.


In October 2011, the DECC Minister (Chris Huhne, before some local difficulties with penalty points) proposed in a consultation to reduce the subsidies for photovoltaic schemes which became eligible after 12 December 2011. This modification was to cut in 1 April 2012. The original scheme paid participants 43.3p per kilowatt hour for 25 years. The proposed revised scheme for new joiners would pay them that rate until April 2012, but thereafter 21p per kilowatt hour for the rest of the 25 years.

The Court of Appeal decided that  section 41 of the Energy Act 2008 did not allow such modification. Questions of retrospectivity and retroactivity arose, as discussed in my previous post here.

But, as the judge in this case of Breyer pointed out, this was not the position faced by the claimants in that case. They had not got as far as becoming eligible for the subsidies. The change in the cut-off dates from April 2012 to December 2011 had made hundreds, if not thousands, of projects unviable because they could not be completed in time. These projects were at various stages, with some subject to signed contracts and others with an expectation that such contracts would arise.


This was the first problem facing the judge. Were all these various arrangements and expectations “possessions” within the meaning of A1P1? The judge found no difficulty with signed contracts. Applying the test in the case law, these were possessions because they were tangible,they were assignable and on their face had a present economic value: [51]. The SoS’s argument was that you had to examine each contract to decide whether it was enforceable either by requiring performance or the payment of damages, before you could decide whether it was an asset. The judge rejected this; any contract is an asset, whatever its terms about termination.

On the contrary, unsigned contracts (described as work opportunities or prospective contracts) were not possessions. It did not matter that a claimant was a preferred bidder or had a reasonable prospect of acquiring a contract.

A conceptually far more difficult problem was posed by the distinction in Strasbourg case law between simple loss of future income (not an A1P1 possession by itself) and marketable goodwill (a possession). A good example of the former was presented by the Malik case (both domestically – here – and Strasbourg – here); the kind of goodwill which is based upon a doctor’s reputation was not a possession because it could not be sold.

The judge drew these fine distinctions together at [75]

(a) Loss of future income is not a possession protected by A1P1;

(b) Loss of marketable goodwill may be a possession protected by A1P1;

(c) There are a number of factors which may point towards the loss being goodwill rather than the capacity to earn profits in the future. One of those will be marketability. Another will be whether or not the accounts and arrangements of the claimant are organised in such a way as to allow for future cash flows to be capitalised.

(d) In addition, the reason why goodwill may be an asset, and therefore a possession under A1P1, is because it is something which has been built up in the past and has a present-day value, as distinct from something which is only referable to events that may or may not happen in the future.

(e) Thus, if there is interference which causes a loss of marketable goodwill at the time of the interference, and if that can be capitalised, then it is prima facie protected by A1P1. If, on the other hand, the interference causes only a potential loss of goodwill for the future, then it is a claim for loss of future profit and is not recoverable.

After analysing the specific arrangements, the judge concluded that contracts entered into by the claimants prior to 31 October which became incapable of performance because of the Minister’s announcement  represented elements of the marketable goodwill in their businesses and therefore represented a possession protected by A1P1: [84].

The next argument was based upon legitimate expectation. The judge concluded that this could not act as a trump card to get round the “loss of future income” problem posed by Strasbourg case law. And even if in theory it could, it had to be linked to an interest in property which would be absent if there was no signed contract. Neither condition was satisfied in the case where there was a simple expectation of future profits but no signed contract.


The judge summarised the issues which arose under this heading as follows

110.The first issue in respect of interference is whether it is enough for the claimants to be able to point to “material economic consequences” (see Rix LJ in Malik) caused by the alleged action or whether, in order to constitute interference, that is only one of a number of necessary conditions which the claimants must establish.

111. The second debate, and the most interesting single issue in this case, is whether the making of the Written Ministerial Statement on Monday 31 October 2011 and the consultation document published on the same day constituted action by the defendant sufficient to trigger a claim under A1P1. It is the defendant’s case that the action was “merely a proposal” and would not and did not affect the obligations between the parties so as to give rise to an A1P1 claim.

112. There is also a third issue, raised by the defendant, to the effect that the concluded contracts were cancelled or repudiated, not by any action of the defendant, but by the claimants themselves, for economic reasons. The suggestion is that, in consequence, there is a causation argument open to the defendant, to the effect that it was not the proposal that caused any material economic consequences, but the claimants’ independent reaction to it.

The judge rejected the first contention. Material economic consequences were necessary to establish an A1P1 but did not by themselves amount to interference. For that some form of state action was required.

The second contention had been rejected by Mitting J in the initial judicial review (see my post here) and was rejected similarly by Coulson J. An unlawful proposal was enough. This was because the mischief arising out of the proposal was not what would necessarily happen in the future as a result, but the immediate ‘blight’ created by the possibility of that future action, in particular the effect upon those signed/concluded contracts predicated on the basis of the original subsidy of 43.3p per kWh. As the judge also observed,

it would be a very odd result in all the circumstances if the claimants could show possessions for A1P1 purposes, but could not show interference with those possessions because the proposal did its damage immediately, and therefore never needed to be enacted.

The judge was also unpersuaded by the argument that the claim for interference was based upon the claimants’ reaction to the proposal, as opposed to its inevitable economic consequences.


On this the SoS started a few points down.  If your action has been declared unlawful by a judge and the Court of Appeal, how do you later justify it under A1P1? Answer: with grave difficulty. The judge derived a good deal of assistance from the Infinis case at first instance (see my post here). On the face of it, if an interference was declared as unlawful, as a matter of principle, it could not be justified. The judge robustly rejected the SoS’s argument that because the unlawfulness was to do with the means by which the interference occurred, rather than the lawfulness of the SoS’s underlying intention.

it seems to me to be wrong in principle for the State to seek to defend itself by reference to something that it did not do, in order to divert attention away from the unlawful action that it did choose to take. The State has to take responsibility for its actions, and that includes its selected method of implementation.

Quite so. That is a very dodgy argument – we mean well, and that fact that we behaved unlawfully is neither here nor there; we could have behaved lawfully. And the judge was alive to its impracticability – a court would have to look at a hypothetical alternative legislative programme which could have been lawful in order to compare it with the method in fact adopted unlawfully.

Once unlawfulness was established, then fair balance did not and could not arise. But the judge rejected the SoS’s case on this as well. The unlawful act saved Government £1.6 bn. It caused losses of £200m to the claimants. In the absence of compensation to those claimants, a fair balance was not struck.

Just satisfaction

This was rather more fact-sensitive, and the judge could only make some initial observations. He rejected the submissions that granting damages would violate the principle that damages are not awarded for maladministration, and that damages should not be awarded if they were complex to establish or calculate. More positively for the claimants, he concluded at [158] that

the whole point of the FIT scheme was that private companies were positively encouraged by the Government to invest and take the commercial risk required. The defendant cannot now hide behind that structure (which it promoted) in seeking to avoid liability for the losses that it has caused.


This is a long post, for a good reason. This case is replete with human rights and public law arguments which I can only touch on. But I hope I have conveyed the scepticism expressed by the judge in response to some very flaky arguments advanced by the SoS.  And the findings are likely to lead to substantial damages for at least those operators who had signed contracts on the day the government pulled the rug on its previous proposals. A1P1, as I have repeatedly pointed out (see my posts below) is playing a significant part in developing our law of damages for unlawful governmental action.

 Sign up to free human rights updates by email, Facebook, Twitter or RSS

Related posts:

Welcome to the UKHRB

This blog is run by 1 Crown Office Row barristers' chambers. Subscribe for free updates here. The blog's editorial team is:
Commissioning Editor: Jonathan Metzer
Editorial Team: Rosalind English
Angus McCullough QC David Hart QC
Martin Downs
Jim Duffy

Free email updates

Enter your email address to subscribe to this blog for free and receive weekly notifications of new posts by email.




7/7 Bombings 9/11 A1P1 Aarhus Abortion Abu Qatada Abuse Access to justice adoption AI air pollution air travel ALBA Allergy Al Qaeda Amnesty International animal rights Animals anonymity Article 1 Protocol 1 Article 2 article 3 Article 4 article 5 Article 6 Article 8 Article 9 article 10 Article 11 article 13 Article 14 article 263 TFEU Artificial Intelligence Asbestos Assange assisted suicide asylum asylum seekers Australia autism badgers benefits Bill of Rights biotechnology birds directive blogging Bloody Sunday brexit Bribery British Waterways Board Catholic Church Catholicism Chagos Islanders Charter of Fundamental Rights child protection Children children's rights China christianity circumcision citizenship civil liberties campaigners civil partnerships climate change clinical negligence closed material procedure Coercion Cologne Commission on a Bill of Rights common buzzard common law communications competition confidentiality confiscation order conscientious objection consent conservation constitution contact order contempt of court Control orders Copyright coronavirus costs costs budgets Court of Protection crime criminal law Criminal Legal Aid criminal records Cybersecurity Damages data protection death penalty declaration of incompatibility defamation DEFRA Democracy village deportation deprivation of liberty derogations Detention devolution Dignitas dignity Dignity in Dying diplomacy director of public prosecutions disability Disability-related harassment disciplinary hearing disclosure Discrimination Discrimination law disease divorce DNA doctors does it matter? domestic violence Dominic Grieve don't ask don't ask don't tell don't tell Doogan and Wood double conviction DPP guidelines drones duty of care ECHR economic and social rights economic loss ECtHR Education election Employment Environment environmental information Equality Act Equality Act 2010 ethics Ethiopia EU EU Charter of Fundamental Rights EU costs EU law European Convention on Human Rights European Court of Human Rights European Court of Justice european disability forum European Sanctions Blog Eurozone euthanasia evidence Exclusion extra-jurisdictional reach of ECHR extra-territoriality extradition extradition act extradition procedures extradition review extraordinary rendition Facebook Facebook contempt facial recognition fair procedures Fair Trial faith courts fake news Family family courts family law family legal aid Family life fatal accidents act Fertility fertility treatment FGM fisheries fishing rights foreign criminals foreign office foreign policy France freedom of assembly Freedom of Association Freedom of Expression freedom of information Freedom of Information Act 2000 freedom of movement freedom of speech free speech game birds gangbo gang injunctions Garry Mann gary dobson Gary McFarlane gay discrimination Gay marriage gay rights gay soldiers Gaza Gaza conflict Gender General Dental Council General Election General Medical Council genetic discrimination genetic engineering genetic information genetics genetic testing Google government Grenfell grooming Gun Control gwyneth paltrow gypsies habitats habitats protection Halsbury's Law Exchange hammerton v uk happy new year harassment Hardeep Singh Haringey Council Harkins and Edwards Health healthcare health insurance Heathrow heist heightened scrutiny Henry VII Henry VIII herd immunity hereditary disorder High Court of Justiciary Hirst v UK HIV HJ Iran HM (Iraq) v The Secretary of state for the home department [2010] EWCA Civ 1322 Holder holkham beach holocaust homelessness Home Office Home Office v Tariq homeopathy hooding Hounslow v Powell House of Commons Housing housing benefits Howard League for Penal Reform how judges decide cases hra damages claim Hrant Dink HRLA HS2 hs2 challenge hts Human Fertilisation and Embryology Act Human Fertilisation and Embryology Authority human genome human rights Human Rights Act Human Rights Act 1998 human rights advocacy Human rights and the UK constitution human rights commission human rights conventions human rights damages Human Rights Day human rights decisions Human Rights Information Project human rights news Human Rights Watch human right to education human trafficking hunting Huntington's Disease HXA hyper injunctions Igor Sutyagin illegality defence immigration Immigration/Extradition Immigration Act 2014 immigration appeals immigration detention immigration judge immigration rules immunity increase of sanction India Indonesia Infrastructure Planning Committee inherent jurisdiction inherited disease Inhuman and degrading treatment injunction Inquest Inquests insult insurance insurmountable obstacles intelligence services act intercept evidence interception interests of the child interim remedies international international conflict international criminal court international humanitarian law international human rights international human rights law international law international treaty obligations internet internet service providers internment internship inuit investigation investigative duty in vitro fertilisation Iran iranian bank sanctions Iranian nuclear program Iraq Iraqi asylum seeker Iraq War Ireland irrationality islam Israel Italy iTunes IVF ivory ban jackson reforms Janowiec and Others v Russia ( Japan Jason Smith Jeet Singh Jefferies Jeremy Corbyn jeremy hunt job Jogee John Hemming John Terry joint enterprise joint tenancy Jon Guant Joseph v Spiller journalism judaism judges Judges and Juries judging Judicial activism judicial brevity judicial deference judicial review Judicial Review reform judiciary Julian Assange jurisdiction jury trial JUSTICE Justice and Security Act Justice and Security Bill Justice and Security Green Paper Justice Human Rights Awards JUSTICE Human Rights Awards 2010 just satisfaction Katyn Massacre Kay v Lambeth Kay v UK Ken Clarke Ken Pease Kerry McCarthy Kettling Kings College Klimas koran burning Labour Lady Hale lansley NHS reforms LASPO Law Commission Law Pod UK Law Society Law Society of Scotland leave to enter leave to remain legal aid legal aid cuts Legal Aid desert Legal Aid Reforms legal blogs Legal Certainty legal naughty step Legal Ombudsman legal representation legitimate expectation let as a dwelling Leveson Inquiry Levi Bellfield lewisham hospital closure lgbtq liability Libel libel reform Liberal Democrat Conference Liberty libraries closure library closures Libya licence conditions licence to shoot life insurance life sentence life support limestone pavements limitation lisbon treaty Lithuania Litigation litvinenko live exports local authorities locked in syndrome london borough of merton London Legal Walk London Probation Trust Lord Bingham Lord Bingham of Cornhill Lord Blair Lord Goldsmith lord irvine Lord Judge speech Lord Kerr Lord Lester Lord Neuberger Lord Phillips Lord Rodger Lord Sumption Lord Taylor LSC tender luftur rahman machine learning MAGA Magna Carta mail on sunday Majority Verdict Malcolm Kennedy malice Margaret Thatcher Margin of Appreciation margin of discretion Maria Gallastegui marriage material support maternity pay Matthew Woods Mattu v The University Hospitals of Coventry and Warwickshire NHS Trust [2011] EWHC 2068 (QB) Maya the Cat Mba v London Borough Of Merton McKenzie friend Media and Censorship Medical medical liability medical negligence medical qualifications medical records medicine mental capacity Mental Capacity Act Mental Capacity Act 2005 Mental Health mental health act mental health advocacy mental health awareness Mental Health Courts Mental illness merits review MGN v UK michael gove Midwives migrant crisis Milly Dowler Ministerial Code Ministry of Justice Ministry of Justice cuts misfeasance in public office modern slavery morality morocco mortuaries motherhood Motor Neurone disease Moulton Mousa MP expenses Mr Gul Mr Justice Eady MS (Palestinian Territories) (FC) (Appellant) v Secretary of State for the Home Department murder murder reform Musician's Union Muslim NADA v. SWITZERLAND - 10593/08 - HEJUD [2012] ECHR 1691 naked rambler Naomi Campbell nationality National Pro Bono Week national security Natural England nature conservation naturism Nazi negligence Neuberger neuroscience Newcastle university news News of the World new Supreme Court President NHS NHS Risk Register Nick Clegg Nicklinson Niqaab Noise Regulations 2005 Northern Ireland nuclear challenges nuisance nursing nursing home Obituary Occupy London offensive jokes Offensive Speech offensive t shirt oil spill olympics open justice oppress OPQ v BJM orchestra Osama Bin Laden Oxford University paramountcy principle parental rights parenthood parking spaces parliamentary expenses parliamentary expenses scandal Parliamentary sovereignty Parliament square parole board passive smoking pastor Terry Jones patents Pathway Students Patrick Quinn murder Pensions persecution personal data Personal Injury personality rights perversity Peter and Hazelmary Bull PF and EF v UK Phil Woolas phone hacking phone taps physical and mental disabilities physician assisted death Pinnock Piracy Plagiarism planning planning human rights planning system plebgate POCA podcast points Poland Police police investigations police liability police misconduct police powers police surveillance Policy Exchange report political judges Politics Politics/Public Order poor reporting Pope Pope's visit Pope Benedict portal possession proceedings power of attorney PoW letters to ministers pre-nup pre-nuptial Pre-trial detention predator control pregnancy press press briefing press freedom Prince Charles prince of wales princess caroline of monaco principle of subsidiarity prior restraint prison Prisoners prisoners rights prisoners voting prisoner vote prisoner votes prisoner voting prison numbers Prisons prison vote privacy privacy injunction privacy law through the front door Private life private nuisance private use proceeds of crime Professional Discipline Property proportionality prosecution Protection of Freedoms Act Protection of Freedoms Bill Protest protest camp protest rights Protocol 15 psychiatric hospitals Public/Private public access publication public authorities Public Bodies Bill public inquiries public interest public interest environmental litigation public interest immunity Public Order Public Sector Equality Duty putting the past behind quango quantum quarantine Queen's Speech queer in the 21st century R (on the application of) v Secretary of State for the Home Department & Ors [2011] EWCA Civ 895 R (on the application of) v The General Medical Council [2013] EWHC 2839 (Admin) R (on the application of EH) v Secretary of State for the Home Department [2012] EWHC 2569 (Admin) R (on the application of G) v The Governors of X School Rabone and another v Pennine Care NHS Foundation Trust [2012] UKSC 2 race relations Rachel Corrie Radmacher Raed Salah Mahajna Raed Saleh Ramsgate raptors rehabilitation Reith Lectures Religion resuscitation RightsInfo right to die right to family life right to life Right to Privacy right to swim riots Roma Romania Round Up Royals Russia saudi arabia Scotland secrecy secret justice Secret trials security services sexual offence Sikhism Smoking social media social workers South Africa south african constitution Spain special advocates spending cuts Standing starvation statelessness stem cells stop and search Strasbourg super injunctions Supreme Court Supreme Court of Canada surrogacy surveillance swine flu Syria Tax Taxi technology Terrorism terrorism act tort Torture travel treason treaty accession trial by jury TTIP Turkey Twitter UK Ukraine unfair consultation universal jurisdiction unlawful detention USA US Supreme Court vaccination vicarious liability Wales War Crimes Wars Welfare Western Sahara Whistleblowing Wikileaks wildlife wind farms WomenInLaw Worboys wrongful birth YearInReview Zimbabwe


This blog is maintained for information purposes only. It is not intended to be a source of legal advice and must not be relied upon as such. Blog posts reflect the views and opinions of their individual authors, not of chambers as a whole.

Our privacy policy can be found on our ‘subscribe’ page or by clicking here.

%d bloggers like this: