Court of Appeal confirms that dishonesty is essential ingredient in half-secret commission claims

In the latest decision considering secret and half-secret commissions, the Court of Appeal has dismissed an energy customer's claim against its energy supplier for paying commissions to a third-party broker, which were only partially disclosed to the customer: Expert Tooling And Automation Ltd v Engie Power Ltd [2025] EWCA Civ 292. The court has taken the opportunity to clarify certain aspects of the decision in Johnson v FirstRand Bank Ltd [2024] EWCA Civ 1282 (referred to as Hopcraft, see our blog post) in advance of the Supreme Court hearing in that case next week.

In brief terms, in the present decision the Court of Appeal:

• disagreed with the High Court's finding that the scope of the fiduciary duty owed by a broker to a customer is narrowed as a result of the disclosure of commission arrangements, finding instead that the extent of disclosure goes to the question of informed consent, which operates to negate what would otherwise be a breach of duty.
• found that informed consent was not in fact obtained in this case, in circumstances where the customer was not told of the amount of the commission or the fact that commission was added to the unit price for electricity purchased (among other factors) – the fact that the contract with the customer expressly stated that such commission "may" be added was insufficient to negate secrecy.
• held that the payer of a partially disclosed commission can only be liable as an accessory for assisting a breach of fiduciary duty by the customer's agent (in contrast to "fully secret" commissions where a payer may be the primary wrongdoer).
• confirmed that dishonesty is an essential element in any claim based on accessory liability for a broker's breach of fiduciary duty, for which the conventional test from Twinsectra Limited v Yardley [2002] UKHL 12 applies – and that Hopcraft was not incompatible with this approach.

In the present case, no allegation of dishonesty was made against the energy supplier, and the Court of Appeal refused to amend the grounds of appeal to advance a case in dishonesty. Accordingly, the Court of Appeal upheld the High Court's decision to dismiss the claim (albeit on a different basis).

For more information see this post on our Banking Litigation Notes blog.