Hogan Lovells and the Government Legal Department secure victory in the Court of Appeal for the UK Government

The Hogan Lovells team on appeal was led by London partner Charles Brasted (Deputy Practice Group Leader – Global Regulatory and IP; co-head of Public Law and Policy) and included Telha Arshad (Counsel), Louis Biggs (Senior Associate) and Maddy Vincent (Associate). Hogan Lovells were instructed alongside the Government Legal Department by the Department for Energy Security and Net Zero (DESNZ) .

The judgment is an important ruling on the UK’s post-Brexit subsidy control regime, and the Trade and Cooperation Agreement with the EU.  

The judgment can be found here.

Hogan Lovells has been advising the UK Government on this important matter since Bulb entered administration in November 2021, involving their leading restructuring, subsidy control and energy teams. Throughout 2022, the Administrators, Teneo, appointed to run Bulb conducted a marketing process to evaluate how the Administration could come to an end in line with their statutory duties. The Administrators recommended selling Bulb’s business to Octopus. The former Secretary of State approved the proposed transaction and the provision of Government funding in connection with it.  The wider Hogan Lovells team has included energy partner, Ben Sulaiman, co-head of public law and policy, Julia Marlow, and restructuring and special situations counsel, Camilla Eliott Lockhart. 

At first instance, British Gas and E.ON sought to challenge the former Secretary of State's decisions by bringing claims for judicial review. The Divisional Court dismissed the challenges in March 2023 (the judgment is available here).

British Gas and E.ON sought to appeal on the basis that:

• they had not acted with undue delay in bringing their claims at first instance;
• the Divisional Court should have decided for itself whether the subsidy was proportionate (rather than assessing whether the former Secretary of State reached a rational decision that the subsidy was proportionate); and
• the Divisional Court wrongly concluded that the former Secretary of State was reasonably entitled to conclude that the marketing process had been conducted in an open, non-discriminatory and competitive way, such that Octopus’s bid for Bulb was a fair reflection of market value and any subsidy granted in the UK Government’s decision was proportionate.

The Court of Appeal dismissed the appeals and endorsed the factual findings of the Divisional Court, in particular, that Octopus was not provided materially different information about the availability of Government support than other potential bidders. As such, the former Secretary of State was entitled to conclude that the M&A process that was run by Bulb’s administrators was fair, open and transparent and accordingly, and that the subsidy granted was proportionate.