People’s Energy (Supply) - Case Update

The High Court has approved a scheme of arrangement for People’s Energy that will allow the collapsed energy provider to deal with 300,000 potential data breach claims.

Paul Berkovi, Jonathan Marston and Robert Croxen of Alvarez & Marsal were appointed joint administrators of People’s Energy in September 2021, after the company learned that it had suffered a data breach potentially affecting 376,000 accounts relating to some 300,000 customers’ personal data. As a result, it was necessary for the joint administrators to develop an appropriate strategy with their legal advisers to identify and assess the claims, and to allow valid claims to be paid to finalise the administration.

The rationale for the scheme is to bring certainty in relation to the universe of claims People’s Energy potentially faces, and to streamline the claims determination process, replacing the provisions of the Insolvency (England and Wales) Rules 2016, which require appeals to the court in respect of rejected proofs, with access to a more streamlined scheme adjudication process. This is likely to facilitate quicker payments to creditors and, if there are disputes as to the validity and quantum of their claims, to give them access to that adjudication process to avoid the complexity, cost, and delay associated with court proceedings.

In October 2023, the Court gave the company permission to proceed with proposing the scheme, and the company invited creditors to vote on the scheme on the online portal for the administration or at the single meeting of creditors on 26 April.

Now, the Court has sanctioned the scheme, which will set a hard bar date for making claims against the company (three months after the scheme has become effective). These claims include data breach claims and misrepresentation claims made by former customers who allegedly understood that they would become shareholders in People’s Energy. Any claims not made by the claims submission deadline will be released, including against Hiscox, the company’s insurer.

Despite being in administration, the company is now likely able to pay all creditors, including data breach creditors, 100 pence in the pound, as a result of the recovery of significant assets, including approximately £286 million of payments under energy hedging contracts with BP Gas Marketing.

The joint administrators have been assisted by Freshfields and Eversheds. Their latest progress report can be found HERE.