Newer version available

There is a newer version of this publication available:
Fuel Rights Handbook 21st edition

Former ‘tariff customers’ under the Gas Act 1986

• Termination of deemed contracts

If you were a tariff customer of British Gas immediately before 1 March 1996, you will have automatically become a customer with a deemed contract.1Sch 5 para 19(2) GA 1995 You can be held liable to pay the bill under the terms of a deemed contract if you were the tariff customer under the provisions of the Gas Act 1986, before it was amended by the Gas Act 1995. This can only be decided under the terms of the law that applied at that time. A ‘tariff customer’ was defined as ‘a person supplied with gas’ under the Gas Act 1986;2s14(5) GA 1986, repealed by GA 1995 and should not be confused with customers under special tariff schemes run by suppliers. Each supplier is required by the Gas Act to act in accordance with the ‘Gas Code’ laid down in the Gas Act 1986.3Sch 2B GA 1986

 

1     Sch 5 para 19(2) GA 1995 »

2     s14(5) GA 1986, repealed by GA 1995 »

3     Sch 2B GA 1986 »

Termination of deemed contracts

The Gas Code does not specify when a deemed contract comes to an end. This means that a deemed contract continues until it is actively terminated. The contract starts from the moment that fuel is supplied to your home other than under a contract. The duration and methods for terminating a deemed contract should be specified, like the other terms, by each supplier in its contract or terms and conditions. Typical provisions for termination include the customer entering into an express contract, registering with another supplier or disconnection. The liabilities under a deemed contract continue in accordance with the terms of the contract until it is actively brought to an end.1Laverty and others v British Gas Trading Ltd [2014] EWHC 2721

Ofgem has published a statement providing a general, but legally non-binding, interpretation of the ‘deemed contract’ provisions. Its interpretation of the legislation is that gas and/or electricity will need to be consumed in order for a deemed contract to arise between a supplier and the occupier and/or owner. It equally accepts that, ultimately, the existence of a deemed contract is open to interpretation by the courts and depends on each individual case.2Ofgem statement on deemed contracts, 24 June 2010, ofgem.gov.uk/sites/default/files/docs/2010/06/statement-on-deemed-contracts.pdf

 

1     Laverty and others v British Gas Trading Ltd [2014] EWHC 2721 »

2     Ofgem statement on deemed contracts, 24 June 2010, ofgem.gov.uk/sites/default/files/docs/2010/06/statement-on-deemed-contracts.pdf »