Largest human rights claim costs UK Government £60m

A total of almost £60m has been paid out by the UK Government in what is believed to be the highest ever compensation for a claim under the Human Rights Act 1998.

Information disclosed under a freedom of information request reveals the figure, paid out to companies hit by a sudden cut in the "feed-in tariff" subsidy paid for small-scale solar energy generation, mainly by householders.

In October 2011 the Department of Energy & Climate Change proposed bringing the date of the cut from the previously publicised date of 1 April 2012 to 12 December 2011, a date before the end of the consultation on the proposal itself and before the relevant legislation would be approved by Parliament. This had disastrous consequences for the UK solar industry, with many companies becoming insolvent and others losing millions of pounds.

The move was first challenged by judicial review, which resulted in the Court of Appeal finding it unlawful because it would change the subsidy retrospectively, which was ultra vires the Government. That was followed by the human rights claim, which alleged that DECC’s actions had breached the claimants’ right to peaceful enjoyment of their possessions. The High Court and Court of Appeal held on preliminary issues of law that the Government had unjustifiably interfered with the possessions of the claimant companies, the possessions in question being the claimants’ contracts with third parties, and that those companies had suffered loss. Damages were due based on the value of those contracts.

Settlement was reached on the claims, on terms that the figures were to be kept confidential, but these have now been disclosed under the FOI request. The £59.975m total includes the total cost of the settlement along with legal fees.

Trevor Asserson, senior partner at Asserson, solicitors who acted for the largest group of claimants, commented: "This claim was triggered by an unlawful Government decision to cut subsidies to the solar energy industry earlier than the Government’s own published timetable. The outcome was a victory for the business sector and for human rights. This is by a significant margin the largest sum ever recovered on the basis of a Human Rights Act claim in the UK.

"The precedent set by this case gives businesses real protection in the event that Government unlawfully interferes with their activities."