The impact of Hopcraft in practice – half-secret commissions in Expert Tooling v Engie Power

The case of Expert Tooling and Automation Ltd v Engie Power Ltd [2025] EWCA Civ 292 is one of a number of claims concerned with commission paid to an energy broker. Following the Supreme Court’s judgment in Hopcraft v Close Brothers Limited (see our previous analysis on Hopcraft here), in particular the overturning of the concept of “half-secret” commissions, Expert Tooling’s appeal against the Court of Appeal decision against it has been allowed by consent. Expert Tooling will therefore recover the secret commission paid to the broker.

Background

Expert Tooling, a high‑energy‑use manufacturing business, engaged a broker when contracting for electricity supplied by Engie. The broker did not charge Expert Tooling for its services directly. Instead, the broker received commission from Engie, which was embedded within the unit rate Expert Tooling paid Engie for electricity. That resulted in Expert Tooling paying a higher unit price. Whilst Expert Tooling understood that commission would be paid, it did not know how much, how it was calculated, or that the cost was passed directly to it via a higher unit price. This was therefore a “half-secret” commission.

The broker Expert Tooling used to procure electricity entered administration and was later dissolved, so a claim could not be made against it directly. Expert Tooling therefore made a claim against Engie for assisting and / or procuring the broker’s breach of fiduciary duties towards Expert Tooling and seeking recovery of the commission paid. 

At first instance, the High Court dismissed Expert Tooling’s claim, stating that the scope of the broker’s fiduciary duty did not extend to an obligation to disclose the amount of commission received in a “half-secret commission” claim. The Court of Appeal found that the broker had breached its fiduciary duty by failing to obtain informed consent, but that the claim ultimately failed where the commission was deemed “half secret”, due to the absence of “dishonesty” on the part of Engie. The Court of Appeal held that dishonesty on the part of the payer (Engie) was required for the claim to succeed. 

Expert Tooling was given permission to appeal to the Supreme Court on two grounds: 

1. Was the Court of Appeal wrong to distinguish between a "half secret" and a "fully secret" commission?
2. If the two forms of commission are distinct, was the Court of Appeal wrong to apply a test of dishonesty?

Hopcraft & Another v Close Brothers Limited

The Hopcraft case concerned car finance transactions in which dealers received commissions from lenders for introducing customers. Although it was decided that car dealers were not fiduciaries, the Court held that where an agent receives commission and a fiduciary duty is established (as it was in Expert Tooling), the only way for both payor and recipient to avoid liability is via fully informed consent from the principal. Partial disclosure or “half-secret commission” (e.g. being aware of the fact of the commission being paid but not the amount) cannot amount to informed consent. 

Expert Tooling’s Appeal

In light of Hopcraft, and the fiduciary relationship between the broker and the energy customer in the Engie case, the parties agreed that the appeal should be allowed, and the Supreme Court endorsed this agreement. 

In practice, this means that any commission paid to a broker in a fiduciary relationship, which is not disclosed fully and transparently, may give rise to restitutionary liability. Payers of “half-secret commissions” can now no longer rely on the “lack of dishonesty” defence or partial disclosures. 

Conclusion

Going forwards, this means that broker commission must be transparently disclosed (i.e. the fact of commission, the amount and the pricing mechanism) prior to the customer entering into a contract, where a fiduciary relationship exists between the broker and the customer. It would also be prudent to obtain express customer consent. 

If you would like to discuss this further please get in touch with Holly Webb, Caroline Brown, or your usual Burges Salmon contact. Click here to subscribe to our financial services newsletter. 

This article was written by Holly Webb and Caroline Brown.