May-Lean & Co Ltd v The Gas and Electricity Markets Authority & Ors

The Defendant has the responsibility for administering and policing a mandatory system known as “ECO 2” by which energy suppliers (including, for instance, the Second Interested Party) are each obliged to achieve targets for reducing carbon dioxide emissions and consumers’ energy bills through measures that include the installation of energy efficiency measures in peoples’ homes. One of these measures is the installation of loft insulation. The Claimant is the manufacturer of a bespoke product known as “HatchThatch”, invented by Mr Shaun Grimes, which is designed to form part of a loft insulation installation and specifically provides insulation for the loft hatch cover or door within the ceiling of the home being insulated. The First Interested Party has an interest in the proceedings as issues were raised in relation to the interpretation and application of the Building Regulations 2010 (“the Building Regulations”) for which the First Interested Party is responsible.

It is sensible at the start of this judgment to set out the regulatory regime which applies to the ECO 2 scheme. Following this, it is necessary to set out some of the background facts relevant to the dispute. The Claimant’s contentions on the merits will then be examined. There are subsidiary issues in relation to delay and discretion in respect of the grant of relief which arise in the event that the Claimant’s submissions on the merits are accepted.

The ECO 2 scheme was created by the Electricity and Gas (Energy Company Obligation) Order 2014. By virtue of article 3(1A) a carbon emissions reduction target and a home heating costs reduction targets are established for the period from 1 April 2015 to 30 September 2018. The defendant, who is described as the administrator within the terms of the 2014 order, is obliged to ensure that the obligations placed on suppliers under the order equal their overall carbon emissions reduction target. A similar obligation exists in relation to the overall home heating costs reduction target. Also relevant to the claim is a further obligation that was imposed on energy suppliers, namely a carbon saving community obligation, but the obligation period in relation to that obligation came to an end on 31 March 2017. Article 12 explains how the carbon emissions reductions obligation is to be met. It provides as follows:

“12.

Achievement of carbon emissions reduction obligation

(1)

A supplier must achieve its total carbon emissions reduction obligation by no later than 30 September 2018.

(2)

A supplier must –

(a)

achieve its total carbon emissions reduction obligation by promoting carbon qualifying actions …

[…]

(3)

A carbon qualifying action is the installation, at domestic premises, of a measure which is –

(a)

a primary measure or, subject to paragraph (4), a secondary measure;

(b)

installed on or after 1^st April 2015 and in accordance with the Publicly Available Specification, where the installation is referred to in the Specification …”

Each supplier is required to notify the Defendant of each qualifying action completed month by month as a consequence of article 17 of the 2014 order. The 2014 order then, under the provisions made in articles 25, 31 and 32, has a scheme for attributing carbon savings or cost scores to qualifying actions which are notified under article 17, and then providing that information to suppliers and the Secretary of State.

As set out above, article 12(3)(b) requires a carbon qualifying action to be installed “in accordance with the Publicly Available Specification”. For these purposes, the Publicly Available Specification is the document entitled “Publicly Available Specification 2030: 2014 edition 1: Improving the Energy Efficiency of Existing Buildings” (“PAS 2030”). The installation of loft insulation is dealt with by PAS 2030, insofar as relevant to the present claim, as follows:

“B9 Measure BFM.9 Loft Insulation

B9.1 Additional installation requirements

When installing loft insulation, in addition to meeting the core requirements set out in Clauses 4 to 7 of this PAS, the installer shall also work to any standards, specifications, instructions or guidance identified in B9-I1 of Table B9.

[…]

B9-I1 – Additional installation requirements to those in the core of this PAS (Clauses 4-7)

As required in Clause 4.4, the methods used for the installation of loft insulation products or systems shall be as specified by the supplier, where provided.

Where relevant to the type of installation being undertaken, the requirements or guidance given in “General requirements and guidance for the installation of cold roof loft insulation (see 8.7).”

Reference to paragraph 8.7 of PAS 2030 will be noted within the text of the requirements above. Paragraph 8.7 provides as follows:

“8.7

CITB

General requirements and guidance for the installation of cold roof loft insulation”

The effect of PAS 2030 is, therefore, to incorporate the document published by the Construction Industry Training Board (“CITB”) in September 2013 “General requirements and guidance for the installation of cold roof loft insulation” (“the CITB Requirements Guidance”) into the PAS requirements. The relevant parts of the CITB general requirements and guidance are as follows:

“2: General requirements and guidance

2.1

All installers contracted to perform loft insulation works shall:

[…]

(f)

ensure that all legal and statutory obligations, in relation to the work, are met.

[…]

3: Materials and Products

[…]

3.2

Approval

All materials and products used shall be approved by the relevant authority and covered by the relevant industry standards (BS or EN, where available) or UKAS-accredited third party certification.

3.3

Suitable materials and products for loft insulation (informative)

The following list is non-exclusive, other materials and systems may be used if they comply with clauses 3.1 and 3.2. The industry standards governing these materials are listed in Appendix 2: Index of Industry Standards. (Please refer to the manufacturer’s website for specific data sheets).

- Mineral wool rolls and slabs

- Blown mineral fibre granules or pellets

- Blown cellulose fibre

- Wool-based batts

- Spray applied rigid closed-cell polyurethane (PUR) insulation

- Rigid foam board

- Pipe and tank insulation

[…]

4: Scope and extent

4.1

Coverage

The insulation works shall cover the entire loft space, including all tanks and pipes, unless there is a compelling reason, which must be documented (see clause 5.7.6)

[…]

5.4

Insulation and draught-proofing of loft hatches

5.4.1

Required level of insulation

The loft hatch cover shall be completely insulated, as far as practical, to at least the same U-Value degree as the rest of the roof space. As a minimum, the requirements of the current building regulations/standards shall apply.

5.4.2

Suitable methods of insulating and draught-proofing Loft hatches

Loft hatches should be insulated and draught-proofed in accordance with the insulation material’s specifications or manufacturer’s instructions.

5.4.3

Special requirement for blown fibrous materials

In the case of blown fibrous materials, a suitable barrier shall be provided around the loft hatch to ensure that the insulating material does not ingress into the dwelling when the loft hatch cover is opened (in line with applicable industry standards).”

The defendant publishes Delivery Guidance in relation to the ECO 2 scheme. The Guidance provides as follows, in relation to the applicable standards:

“Standards relating to the installation of ECO measures

2.27.

Suppliers should ensure that the installation of a measure is carried out in accordance with the relevant standards. How this is demonstrated will vary depending on whether or not the measure is referred to in the Publicly Available Specification 2030:2014 Edition 1 (“PAS”).

2.28.

If a measure is referred to in PAS, the installation of the measure must be carried out in accordance with the provisions of PAS, building regulations and any other regulations that relate to the installation of the measure.

2.29.

If a measure is not referred to in PAS, the installation of that measure must be carried out in accordance with building regulations and any other regulations that relate to the installation of the measure.

Demonstrating compliance with PAS

2.30.

Compliance with the provisions of PAS can be demonstrated where the installation is carried out by a PAS-certified installer. Installers can be certified by independent third parties according to the requirements of Publicly Available Specification 2031:2015.

2.31.

Suppliers should contact us directly to discuss alternative methods for demonstrating compliance with PAS if the installation is not carried out by a certified installer. Should a supplier use an alternative method, we may also require additional monitoring.”

The Delivery Guidance also makes provision for a percentage of a measure which must be installed in the following terms:

“Percentage of a measure that must be installed

2.38.

Suppliers must install 100% of a measure at premises, unless there are reasonable grounds for not doing so.

2.39.

For clarity, below are some examples of what constitutes 100% of a measure for different measure types:

(a)

for loft insulation, 100% of the measure will be the insulation of the entire loft, including the hatch

[…]

2.40.

Some examples of what we consider reasonable grounds for installing less than 100% of a measure include planning restrictions, inability to gain access to necessary work areas, or lack of consent from the occupant or landlord of the premises.”

It will be clear from the documents that have been quoted above that both PAS 2030 and the Delivery Guidance make reference to the Building Regulations. The CITB requirements and guidance at paragraph 2.1(f) makes a cross-reference to legal and statutory obligations being met. Regulation 3(1)(h) of the Building Regulations includes within the definition of “building works” for the purposes of the Regulations, work which is required by regulation 23. Regulation 23 of the Building Regulations provides as follows:

“23.

Requirements for the renovation or replacement of thermal elements

(1)

Where the renovation of an individual thermal element –

(a)

constitutes a major renovation; or

(b)

amounts to the renovation of more than 50% of the element’s surface area;

the renovation must be carried out so as to ensure that the whole of the element complies with paragraph L1(a)(i) of Schedule 1, in so far as that is technically, functionally and economically feasible.”

The requirement to undertake building work so that it meets applicable requirements contained within Schedule 1 of the Regulations is reinforced by regulation 4(1)(a). A “thermal element” is defined by regulation 2(3) in the following terms:

“2(3) In these Regulations “thermal element” means a wall, floor or roof (but does not include windows, doors, roof windows or roof-lights) which separates a thermally conditioned part of the building (“the conditioned space”) from –

(a)

the external environment (including the ground); or

(b)

in the case of floors and walls, another part of the building which is –

(i)

unconditioned;

(ii)

an extension falling within class 7 of Schedule 2; or

(iii)

where this paragraph applies, conditioned to a different temperature,

and includes all parts of the element between the surface bounding the conditioned space and the external environment or other part of the building as the case may be.”

The requirements of part L1 of Schedule 1 of the Building Regulations are set out, so far as relevant, as follows:

“Conservation of fuel and power

L1. Reasonable provision shall be made for the conservation of fuel and power in buildings by –

(a)

limiting heat gains and losses –

(i)

through thermal elements and other part of the building fabric …”

For the purpose of providing practical guidance with respect to the requirements of any of the provisions of the Building Regulations, the First Interested Party is given power under section 6 of the Building Act 1984 to approve documents. There is an Approved Document in relation to “conservation of fuel and power”. The purpose of the Approved Document is described in paragraphs 1.2 and 1.3 as follows:

“1.2.

The intention of issuing Approved Documents is to provide guidance about compliance with specific aspects of building regulations in some of the more common building situations. They set out what, in ordinary circumstances, may be accepted as reasonable provision for compliance with the relevant requirement(s) of building regulations to which they refer.

1.3.

If guidance in an Approved Document is followed there will be a presumption of compliance with the requirement(s) covered by the guidance. However, this presumption can be overturned, so simply following guidance does not guarantee compliance; for example, if the particular case is unusual in some way, then “normal” guidance may not be applicable. It is also important to note that there may well be other ways of achieving compliance with the requirements. There is therefore no obligation to adopt any particular solution contained in this Approved Document if you would prefer to meet the relevant requirement in some other way. Persons intending to carry out building work should always check with their building control body, either the local authority or an approved inspector, that their proposals comply with building regulations.” (author’s emphasis)

The relevant part of the Approved Document which deals with thermal elements provides as follows:

“The Provision of Thermal Elements

U-values

5.2.

U-values shall be calculated using the methods and conventions set out in BR 443.

5.3.

Reasonable provision for newly constructed thermal elements such as those constructed as part of an extension would be to meet the standards set out in Table 2.

5.4.

Reasonable provision for those thermal elements constructed as replacements for existing elements would be to meet the standards set out in Table 2.

Table 2

Element1	Standard W/(m2K)2
Wall	0.28
Pitched roof – insulation at ceiling level	0.16
Pitched roof – insulation at rafter level	0.18
Flat roof or roof with integral insulation	0.18
Floors3	0.224
Swimming pool basin	0.25

Notes

1.

“Roof” includes the roof parts of dormer windows, and “wall” includes the wall parts (cheeks) of dormer windows.

2.

Area-weighted average values.

3.

A lesser provision may be appropriate where meeting such a standard would result in a reduction of more than 5% in the internal floor area of the room bounded by the wall.

4.

A lesser provision may be appropriate where meeting such a standard would create significant problems in relation to adjoining floor levels. The U-value of the floor of an extension can be calculated using the exposed perimeter and floor area of the whole enlarged dwelling.

Continuity of insulation and airtightness

5.5.

The building fabric should be constructed so that there are no reasonably avoidable thermal bridges in the simulation layers caused by gaps within the various elements, and at the edges of elements such as those around window and door openings. Reasonable provision should also be made to reduce unwanted air leakage through the new envelope parts. The work should comply with all the requirements of Schedule 1, but particular attention should be paid to Parts F and J.

5.6.

A suitable approach to showing the requirement has been achieved would be to adopt Accredited Construction Details at www.gov.uk.”

The reference in paragraph 5.6 to Accredited Construction Details is a cross-reference to another Government publication. That publication provides the following observation in respect of loft hatches:

“Proprietary loft hatches with low air permeability characteristics should be fitted in lieu of site manufactured hatches. Where site manufactured hatches are installed these should be complemented with draught stripping to minimise air leakage into the loft space above.”

The contentions of the Claimant relate to the insulation of the loft hatch as part of the fitting of insulation under the ECO 2 scheme. As described by Mr Grimes in his evidence, there are generally three types of loft hatch. The design which is by far the most common is a loft hatch which comprises a piece of wood resting on a protruding lip around the perimeter of the frame at the entrance to the loft. In order to open this type of loft hatch, it is simply pushed open and set to one side. The other two types of loft hatch, which are less common, are so far as the second type is concerned those where the entrance to the loft is covered by a hinged door which opens downward and hangs by its hinges, so as to facilitate entry to the loft; the third type is a variant of this second type where a telescopic ladder is attached to the back of the door.

It is common ground between the parties that the conventional means of insulating the loft hatch which has been deployed for many years by installers is a method whereby elements of the loft insulation that has been used on the remainder of the roof are put into a plastic bag (often the original packaging in which the insulation came) and then formed into a cushion before being stapled to the back of the loft hatch. This method is described in various ways within the papers (including, in the extracts from the evidence set out below, the “cushion method”), but for the purposes of this judgment the neutral term of “self-fabricated method” is used. As set out above, the claimant manufactures Mr Grimes’ design of proprietary loft hatch insulation which is attached to the back of the loft hatch but which incorporates a fringe or skirt around its periphery, thereby covering the whole of the frame of the loft access. Mr Grimes accepts that neither the HatchThatch nor the self-fabricated method can insulate the third type of loft hatch with complete effectiveness, but contends that the self-fabricated method can only work for the first type of loft hatch (and then not with complete efficiency and effectiveness for the reasons set out below) and not for the second; whereas the HatchThatch can effectively insulate both of the first two types of loft hatch.

Since the HatchThatch was invented in or around 2010 or 2011, Mr Grimes has been complaining to the Defendant that they should no longer be accepting the use of the self-fabricated method under the ECO 2 scheme, but requiring the installation of a proprietary product such as the HatchThatch. His reasons for this contention include, amongst other matters, the legal contentions which are advanced as part and parcel of this claim. Evidence has been adduced on behalf of the claimant from those involved in either installing loft insulation or commissioning its installation, attesting to the effectiveness of the HatchThatch as an insulation solution which, in the opinion of the Claimant, is more effective than the self-fabricated method. Mr Grimes summarises his contentions in relation to the failings of the self-fabricated method in the following terms in his first witness statement:

“10.

The major problem (and in my view it is a major problem) with installer self-made products is that they must, and do, leave gaps (thermal bridges) around their entire periphery, as to allow, by not impeding, the opening and closing process of the loft hatch. In the majority of instances as BB products are round cushions they are unable to properly fit into the acute right angled corners of the loft hatch. This means that further gaps must, and do, exist. It is this gap problem that HatchThatch solves as it is able to 100% insulate the loft hatch without leaving any thermal bridges by not impeding the opening and closing process. It is this 100% total insulation ability, which is unique to HatchThatch, which also provided the necessary innovative inventive step that enabled a patent to be granted.”

In response to these contentions, the Defendant commissioned evidence from Mr Geoffrey Chambers of the British Board of Agrément (“BBA”) who in the context of discussing paragraph 4.1 of the CITB requirements and guidance states as follows:

“14.

It is, however, important that the Court should be provided with a correct understanding of what paragraph 4.1 of the CITB Guidance was intended to convey. The content of the CITB Guidance was developed with a view to reflecting the industry good practice which was to place insulating material over the entire loft space, albeit subject to the practical limitations arising from having to take accounts of the physical features of the loft. The point that paragraph 4.1 of the CITB Guidelines was intended to convey was that installers should do their best to cover the floor space of the loft, and, where this was not possible (for example, because of cold water tanks or other obstacles), they should still do what could reasonably be done, such as by installing under or around the obstacles. Paragraph 4.1 was not intended to be read as meaning that absolutely no gaps (however small, and whether full or partial) in the insulation layer are acceptable.

15.

The comprehensiveness of the insulation coverage, and the quality of the overall insulation result achieved, will inevitably depend on the competence of, and degree of care shown by, the installer. In my experience, it is in fact often possible for a skilled installer to fit the cushion method in such a way as to fully cover the loft hatch and also provide a degree of insulation coverage extending over its surrounds (rather than simply leaving a gap). For instance, this can be achieved by the installer securing the insulation material in a sack which extends slightly within the perimeter of the loft hatch, so that the sack will, if filled with enough insulation material, bulge to cover the entire loft hatch. Whilst I accept that this is slightly harder to achieve with the drop-down style of loft hatch, practically complete insulation coverage can still be achieved by tucking the insulation in when closing the hatch. In addition to these installation techniques, draught-proofing is typically used to ensure an airtight fit around the hatch.

16.

Sometimes there are situations where the entire loft hatch cannot be insulated such as where a ladder is attached to the loft hatch, but as I have noted, these practical limitations are catered for in paragraph 4.1 of the CITB Guidance which requires that the entire loft space be insulated “unless there is a compelling reason”.” (author’s emphasis)

The Defendant also obtained evidence from Mr Colin King of the Building Research Establishment (“BRE”) who, again, in the context of paragraph 4.1 of the CITB requirements and guidance states as follows:

“26.

I have read the Claimant’s grounds of challenge and note that one of the arguments made by the Claimant is that the cushion method does not comply with paragraph 4.1 of the CITB guidance, which states that “insulation works shall cover the entire loft space, including all tanks and pipes, unless there is a compelling reason”. The Claimant’s point appears to be that (in its view) the cushion method cannot be installed in a way that would achieve compatibility with paragraph 4.1 because, however much care and skill is used by the installer, there will always be some gap in the continuity of the insulation coverage.

27.

The Claimant’s argument relies on one sentence of the CITB guidance to produce a meaning that was, to the best of my knowledge and recollection, not intended by the industry when drafting the CITB guidance. Notably the CITB guidance does not say anything at all that is specifically about the leaving of gaps around loft hatches. Yet, as I have already explained above, the cushion method is the usual method of holding insulating material in place above loft hatches and was when the CITB guidance was developed. Anyone who has any familiarity with that insulation approach would know that (as the Claimant itself points out) that use of that method will involve some gap in the insulating material, so that the loft hatch can be opened and closed. If no gap were left, then the result would be that either the loft hatch could not be opened or closed or some of the insulation material would get caught or dislodged when the loft hatch was opened and closed, and this would cause damage to the insulating material or otherwise reduce the effectiveness of the loft insulation. Given that everyone with any practical knowledge of loft insulation would have realised this, this would have been true of industry representatives (including myself) who were involved during the development of the CITB guidance. Therefore, if the CITB considered that the cushion method was no longer being consistent with accepted good practice for installing loft insulation, then the CITB guidance would surely have said this expressly.” (author’s emphasis)

In response to the observations made about the incorporation of draught proofing, the Claimant adduced a fourth witness statement from Mr Grimes that provided as follows:

“The problem with this is that draught proofing strips are commonly a few millimetres in depth. I exhibit a print out of a picture of a commonly used draught-proofing strip. This measures 4mm in depth. That contrasts with the minimum 275mm depth of insulation in the rest of the loft. Also, while draught strips provide a physical barrier, unlike insulation materials they are not constructed of material which is specifically designed to prevent heat loss.”

The Claimant also adduced evidence from Mr Matthias Hessler who, amongst other contentions, observes that the provision of an effective draught seal around the edge of the loft hatch does not amount to the installation of effective insulation materials as the draught seal is not itself an insulation material.

These extracts from the evidence suffice to demonstrate the nature of the issue between the Claimant, the Defendant and the Second Interested Party, in respect of the necessity of fitting the HatchThatch or other similar proprietary loft hatch insulation product. Other aspects of the evidence are more pertinently referenced in relation to the specific contentions raised by the Claimant and are referred to below.

Mr Coppel QC, on behalf of the Claimant, accepts, quite properly, that there are many factual disputes raised on the face of the papers which the Court does not have either the jurisdiction or the proper procedure to resolve. Issues of this kind include, for instance, whether the HatchThatch is as efficacious as Mr Grimes claims, and the circumstances in which the Second Interested Party decided not to proceed to include the HatchThatch as part of the insulation works which it commissions. It is not open to the Court to resolve the clear dispute as to whether or not the self-fabricated method or the HatchThatch is a preferable means of insulating a home’s loft. The case advanced on behalf of the Claimant by Mr Coppel raises a sequence of four grounds which are founded upon the central contention that, in approving home insulation works which include the self-fabricated method of insulating the loft hatch as carbon qualifying actions, the Defendant has misinterpreted and misapplied the relevant legislation, and in particular the subsidiary requirements and guidance which have been set out above. Thus, his grounds are that there has been an error of law, based upon the failure to apply a proper construction or interpretation of the documents which have been set out above.

The court’s jurisdiction in relation to the interpretation of certain documents (comprising requirements, policy or guidance) being a matter of law which a decision-maker must apply correctly in order to reach a lawful decision is well established. The case of Re McFarland [2004] 1 WLR 1289 [2004] UKHL 17 is an example bearing upon the interpretation of a ministerial policy established by the Secretary of State for ex gratia compensation payments for a class of acquitted defendant. The question arose as to whether or not the applicant’s case came within the policy. In reaching his conclusions (which differed from the majority of the House of Lords in the interpretation of the policy but not as to the result) Lord Steyn offered the following observations in paragraph 24 of his speech:

“In my view, however, in respect of the many kinds of “soft laws” with which we are now familiar, one must bear in mind that citizens are led to believe that the carefully drafted and considered statements truly represent government policy which will be observed in decision-making unless there is good reason to depart from it. It is an integral part of the working of a mature process of public administration. Such policy statements are an important source of individual rights and corresponding duties. In a fair and effective public law system such policy statements must be interpreted objectively in accordance with the language employed by the minister. The citizen is entitled to rely on the language of the statement, seen as always in its proper context. The very reason for making the statement is to give guidance to the public. The decision-maker, here a minister, may depart from the policy but until he has done so, the citizen is entitled to ask in a court of law whether he fairly comes within the language of the publicly announced policy. That question, like all questions of interpretation, is one of law. And on such a question of law it necessarily follows that the court does not defer to the minister: the court is bound to decide such a question for itself, paying, of course, close attention to the reasons advanced for the competing interpretations. This is not to say that policy statements must be construed like primary or subordinate legislation. It seems sensible that a broader and wholly untechnical approach should prevail. But what is involved is still an interpretative process conducted by a court which must necessarily be approached objectively and without speculation about what a particular minister may have had in mind.”

A further example of the court exercising this kind of jurisdiction was the decision of the Supreme Court in Tesco Stores Ltd v Dundee City Council [2012] PTSR 983 [2012] UKSC 13. That case concerned the interpretation of planning policy. The Supreme Court concluded that the interpretation of planning policy was a question of law and that “policy statements should be interpreted objectively and in accordance with the language used, read as always in their proper context (see the judgment of Lord Reed at paragraph 18). At paragraph 19 of his judgment, with which the other members of the court agreed, Lord Reed provided as follows:

“19 That is not to say that such statements should be construed as if they were statutory or contractual provisions. Although a development plan has a legal status and legal effects, it is not analogous in its nature or purpose to a statute or a contract. As has often been observed, development plans are full of broad statements of policy, many of which may be mutually irreconcilable, so that in a particular case one must give way to another. In addition, many of the provisions of development plans are framed in language whose application to a given set of facts requires the exercise of judgment. Such matters fall within the jurisdiction of planning authorities, and their exercise of their judgment can only be challenged on the ground that it is irrational or perverse: Tesco Stores Ltd v Secretary of State for the Environment [1995] 1 WLR 759 , 780, per Lord Hoffmann. Nevertheless, planning authorities do not live in the world of Humpty Dumpty: they cannot make the development plan mean whatever they would like it to mean.”

The Supreme Court recently revisited the question of the interpretation of planning policy in the case of Suffolk Coastal District Council v Hopkin Homes Ltd [2017] UKSC 37. In a judgment with which the other members of the Supreme Court agreed Lord Carnwath observed in the context of the interpretation of planning policy that it was important that the role of the court was not overstated (see paragraph 24) and at paragraph 25 observed as follows:

“25 It must be remembered that, whether in a development plan or in a non-statutory statement such as the NPPF, these are statements of policy, not statutory texts, and must be read in that light. Even where there are disputes over interpretation, they may well not be determinative of the outcome.”

As will become apparent when the specific Grounds relied upon by the Claimant are identified, the contentions in this case relate to the correct interpretation of the CITB requirements and guidance, the Defendant’s Delivery Guidance and the Approved Document published by the First Interested Party. Reliance is placed on these documents as being incorporated by reference within PAS 2030 and therefore forming part of the requirements of Article 12 to the 2014 Order in order to enable the works to be recognised as a carbon qualifying action.

In the light of the authorities set out above when approaching the interpretation of the CITB requirements and guidance, the defendant’s Delivery Guidance and the Approved Document it is important in my view to bear in mind the following matters. Firstly, these documents are not statutes or legal instruments and the approach to interpretation must bear that carefully in mind. They must be interpreted in context, which includes the purpose for which they have been produced and the audience to which they are directed (namely the installers of loft installation rather than lawyers or courts). These are the kinds of documents where, to quote Lord Steyn, “a broader and wholly untechnical approach should prevail”. It is also, in my view, necessary to have regard to evidence in relation to common practice in respect of the activities to which the documents are addressed. For instance, as is uncontroversial, the fact that the self-fabricated method was the common and widespread practice of those undertaking loft insulation in respect of the approach to be taken to insulating the loft hatch is pertinent to the interpretation of the documents. Against the background of these observations the claimant’s specific Grounds must now be considered.

The text of the CITB requirements and guidance which is relied upon by the claimant for the purposes of this Ground is that which provides that:

“the insulation works shall cover the entire loft space, including all tanks and pipes, unless there is a compelling reason.”

It is submitted that the correct interpretation of this part of the document is that the installation cannot allow for any gaps in the insulation materials installed in the loft space whatsoever. Therefore, it is submitted that the self-fabrication method, which leaves gaps and potentially large gaps around the edges of the loft hatch, does not cover the entire loft space and therefore is incapable of meeting this requirement. The submission is reinforced by reference to paragraphs 2.38 and 2.39 of the defendant’s Delivery Guidance which requires suppliers to install 100% of a measure at premises unless there are reasonable grounds for not doing so. On the basis that the self-fabrication method is not capable of meeting the requirement that the “entire loft space” is covered with insulation, since there may be gaps around the edges of the loft hatch which are not insulated, it is contended that the loft insulation installations that have deployed the self fabrication method do not meet the requirements of the CITB requirements and guidance and therefore do not meet the requirements of PAS 2030 or Article 12 of the 2014 Order and should not have been recognised as a carbon qualifying action.

As a part of the overall context of the case it is pertinent to note the evidence provided bearing upon the nature and extent of the breach which is relied upon by the claimant as a consequence of the self-fabricated method. The gap, or potential gap, which is relied upon is the gap between the loft insulation material which is bundled and attached to the rear of the loft hatch and the insulating material surrounding the frame supporting the loft hatch. Whilst there are various photographs and illustrations within the papers, there is no measured example of the gap which has been provided, nor any estimate of the average dimensions of any such gap. Reliance has been placed upon the gap between the loft hatch and the frame, which whilst fitted with draught proofing as part of any installation, as noted above is not itself insulating material. Given the description of the self-fabrication process in the evidence which I have quoted above in particular from, for instance, Mr Chambers (whose evidence was in this respect disputed by Mr Hessler but which having viewed the illustrative material I have no difficulty understanding), and doing the best that I can on the limited evidence available, it is to be anticipated that any gap might amount to a few centimetres or less.

I am unable to accept the submissions which are made by the Claimant in relation to the CITB guidance and requirements. In my view the Defendant and Second Interested Party are correct to observe that the observations both in the CITB guidance and requirements and the delivery guidance are not to be construed so as to prohibit any gap however tiny in the insulation layer: far more naturally they read as requiring the whole of the loft space to be the subject of the insulation treatment and installation so that areas of the loft are not left untreated. That interpretation does not, as set out above, preclude any gap however small in the insulation layer around the loft hatch, let alone outlaw the use of the self-fabricated method. It is an interpretation of the document which fits far better with the fact that these are practical documents to guide loft insulation installations which will have to grapple with the presence of rafters, pipes and water tanks as well as, potentially, electrical installations and other obstructions in the course of the works. As the defendant points out, the interpretation which the defendant advances also fits with a plain, as opposed to an excessively literal, reading of the documents including in particular paragraph 2.39 of the Delivery Guidance which in relation to 100% of the measure for loft insulation refers specifically to the inclusion of the loft hatch. Thus, bearing in mind in particular that this is intended to be instructions for installers, the more appropriate and natural meaning of the document is that the insulation installation must cover the entire loft area including provision for the loft hatch, rather than the claimant’s contention that the meaning of the document is that there can be no gaps in the insulation layer at any point whatsoever.

There is a further dimension to this part of the case made by the Defendant and the Second Interested Party. In particular, the Defendant relies upon evidence of monitoring which it undertakes in order to ensure that there is compliance with PAS 2030. In accordance with EU Directive 2012/27/EU and in particular Article 7(6) of that legislation, the Defendant has put in place a method of undertaking a significant sample of the installations that have been undertaken so as to ensure that there is compliance with PAS 2030. This monitoring is undertaken by inspection of the installation by a suitably qualified technical monitoring agent so as to make a professional judgment about whether or not the measures required by PAS 2030 have been met.
Technical Monitoring Questions are posed and have to be answered on a pass/fail basis by the inspector and these questions include the following:

“Has the loft hatch been insulated as specified in PAS 2030:2014?

Has the loft hatch been draught proofed as specified in PAS 2030:2014?”

In his evidence Mr Chambers provides information about his experience carrying out inspections of retrofit loft insulation in which he says that as a rough estimate he would have failed around 15% of the installations for “not using the same depth or coverage of material on the loft hatch cover as elsewhere in the loft space”. Against the background of this evidence the Defendant and the Second Interested Party contend that the monitoring in place is an appropriate method of ensuring that the requirements of providing loft insulation installation which is consistent with PAS 2030 have been met.

In response to this Mr Coppel, on behalf of the claimant, submitted that this explanation of the monitoring regime did not address the apparent simplicity of all that was required to meet the specifications of the Defendant’s Delivery Guidance. He drew attention to paragraph 2.30 of the Delivery Guidance which indicates that compliance with the provisions of PAS 2030 “can be demonstrated where the installation is carried out by a PAS-certified installer”. Thus, he submits that all that is required in order to satisfy compliance with PAS under the delivery guidance is demonstration that the installation was undertaken by a PAS 2030 certified installer and that is the end of the matter.

In my view that submission is problematic. Whilst Mr Coppel is entitled to point out that that is all the Delivery Guidance says about demonstrating compliance it is perfectly clear from the evidence firstly, that paragraphs 2.27 and 2.28 require not simply the use of a PAS certified installer but also that the installation meets the requirements of PAS 2030. Secondly, it is clear from the evidence that on the ground what in fact is carried out by the Defendant is a system of monitoring so as to ensure that the installations are in substance compliant with PAS 2030. Mr Coppel’s submission does not therefore reduce the force of the point made by the Defendant and the Second Interested Party as to the enforcement of PAS 2030 through the monitoring and inspection regime. In any event reliance upon the monitoring and inspection regime is of secondary importance in circumstances where, in my judgment, there is no substance in the Claimant’s contentions as to the proper interpretation of paragraph 4.1 of the CITB guidance and requirements and paragraphs 2.38 and 2.39 of the Delivery Guidance.

As set out above, paragraph 5.4.1 of the CITB requirements and guidance requires that

“The loft hatch cover shall be completely insulated, as far as practical to at least the same U-Value degree as the rest of the roof space.”

The Claimant’s contention is that if gaps are left in the insulation layer around the edges of the loft hatch cover then this will be bound to worsen the U-Value of the loft hatch area so that it will not have the same performance as other parts of the loft which are fully insulated. The first difficulty in my view with the Claimant’s case is that it rests upon an unproven surmise rather than any empirical evidence. There are no tests or measurements to demonstrate that it is true that the existence of some gap between insulation on the back of the loft hatch and the adjacent insulation of the loft space, in circumstances where the loft hatch will have been draught proofed, will lead to the U-Value of the loft hatch area being less than the remainder of the roof space. That may be a reasonable hypothesis, but it is not a hypothesis which is proven as to either its existence or its extent. Be that as it may, for the purpose of evaluating the claimant’s submissions I will proceed on the basis that the hypothesis is true.

The question is then whether the language of paragraph 5.4.1, taking a purposive construction of the words in the context that they are instructions to installers of loft insulation, is to be understood as prohibiting the use of the self-fabricated method. I cannot accept that proposition. The requirements of the CITB requirements and guidance can, as the defendant submits, clearly be met by covering the whole of the loft hatch cover with the same insulating material at the same depth as has been used in the remainder of the loft space (or an alternative but equally efficient insulating material). Paragraph 5.4.1 has nothing to say in relation to gaps in the insulation installed between the loft hatch cover and surrounding insulation material. It is important to observe that paragraph 5.4.2 does address the gap between the loft hatch and its frame by requiring draught proofing. Far from prohibiting the use of the self-fabricating method, in my judgment when paragraph 5.4.1 and 5.4.2 are read together and sensibly what they describe is the self-fabricated method of insulating the loft hatch cover complemented by draught proofing of the loft hatch. There is, therefore, no substance in the Claimant’s complaint in this respect.

In this Ground the Claimant contends that the self-fabricated method is very likely to cause non-compliance with the requirement within Table 2 of Approved Document L1B which requires a pitched roof to have insulation at ceiling level of 0.16 as a U-Value. This is again submitted to arise as a consequence of a gap said to be created by the self-fabricated method between the insulation attached to the back of the loft hatch and the surrounding insulating material which is part of the wider insulation installation. Evidence introduced by the Claimant from Mr Hessler contends that if there is an area of the loft insulation installation which is performing worse than 0.16 then that will lower the average performance of the loft area and lead to a breach of the requirement. Further the Claimant draws attention to paragraph 5.5 of the document which states that the “building fabric should be constructed so that there are no reasonably avoidable thermal bridges in the insulation layers caused by gaps within the various elements, at the joints between the elements and at the edges of elements such as those around window and door openings”.

In my view there are, again, formidable difficulties facing the Claimant in establishing this Ground of challenge. Firstly, it is important to note that the Approved Document makes clear at paragraph 1.3 that it does not purport to set out rules, but is rather guidance which if followed carries the presumption that a requirement has been complied with. It is a daughter document to the 2010 Regulations which themselves are non-prescriptive as to method but focus instead on the required outcome. So far as the reference to “thermal bridges in the insulation layers caused by gaps within the various elements” is concerned the Defendant correctly observes that there is a careful qualification within the Approved Document of those thermal bridges being “reasonably avoidable”: that therefore calls for a judgment on the basis of each individual insulation installation and does not preclude the use of the self-fabricated method.

Turning to the requirement for new thermal elements involving insulation at ceiling level of the pitched roof requiring a U-Value of 0.16 it is important to appreciate that 0.16 is an area weighted average value. It follows that as a requirement it can be met by some areas of the loft space being insulated to a higher value than others. There is, therefore, simply no basis upon which it can be contended that these provisions rule out the use of the self-fabricated method, since even were it to be accepted for the sake of argument that the self-fabricated method lowered the U-Value in the vicinity of the loft hatch, the requirement can still be complied with by providing insulation in excess of the 0.16 value in other areas of the loft so as to meet the requirement as an area weighted average value. Thus, even though there are differing views expressed within the evidence as to the effect, if any, of the self-fabricated method on the U-Value of a loft insulation installation, and even though it is not possible or appropriate for the court in judicial review proceedings to undertake any resolution of those differing views (which as the First Interested Party points out in his skeleton argument suggests that the claim is bound to fail), were the Claimant’s evidence to be right that there was an impact on the U-Value in the area of the loft hatch as a result of the self fabricated method that would not inevitably lead to a breach of the requirements of the Approved Document. It follows that this Ground must fail.

The Claimant contends that the self fabricated method cannot comply with the requirement of paragraph 3.2 of the CITB requirements and guidance which provides that:

“all materials and products shall be approved by the relevant authority and covered by the relevant industry standards.”

It is submitted that the plastic bag, or other container, into which the insulation material is placed in the self-fabricated method is not a material or product approved for use in loft insulation. Indeed, the plastic bag is highly flammable and the claimant notes that in correspondence in February 2014 the Department for Energy and Climate Change stated that it was not their position that the use of plastic bags was acceptable and that they were not aware of any manufacturer specifying filling of plastic bags with remnant insulation material and affixing it to the loft hatch. As originally formulated in paragraph 27 of the Statement of Facts and Grounds, the claimant’s point was also that a plastic bag filled with leftover insulation materials was not covered by paragraph 3.2 of the CITB requirements and guidance.

In my view this construction of paragraph 3.2 of the CITB requirements and guidance is divorced from the reality of the works and installations for which the document is providing, and again takes an illegitimately literal approach to a practical document directed to installers. The phrase “materials and products” in this context is clearly referring to the insulation materials which are to be used for the purposes of insulation. This interpretation is supported firstly, by paragraph 3.3 and its non-exhaustive list of “materials and products for loft insulation” which is a list of insulation materials and products. Secondly, this interpretation is supported by the implausibility of the consequences of the Claimant’s interpretation which would require that, for instance, the staples, screws, adhesives or any other elements to fix the installation would be covered by the paragraph and require specific accreditation. That is plainly not the intention of paragraph 3.2 and thus this aspect of the Claimant’s case must also be dismissed.

For all of the reasons which I have set out above there is, in my view, no substance in any of the contentions raised by the Claimant in this case and it falls to be dismissed.

In the light of the conclusions which I have reached above it is not necessary for me to deal at length with the arguments which were raised in relation to delay and discretion. Whilst in this case it appears that delay was not considered to be a bar to the grant of permission to bring this application for judicial review, the question of delay nevertheless arises under section 31(6)(b) of the Senior Courts Act 1981 at the stage of considering whether relief should be granted (see, for example, Whitstable Society v Canterbury City Council [2017] EWHC 254 at paragraphs 107-112).

In this case it was accepted by the Claimant that the start date for consideration of delay would be 1^st April 2015, which was the date when the legislation which is in question came into force and thus the first occasion when it could have been contended that the Defendant committed the unlawful act at issue. The pre-action protocol letter in this matter was not written until February 2016 and the proceedings were not issued until 25^th July 2016. No explanation is provided in the papers as to what, if any, excuse might exist for the undoubtedly significant delay in bringing this case. In the absence of any explanation for a period in excess of a year before proceedings were commenced there is clearly, in my view, considerable weight to be attached to the factor of delay in exercising my discretion as to whether or not relief should be granted. It is then necessary to consider, in accordance with the provisions of section 31(6), whether or not “the granting of the relief sought would be likely to cause substantial hardship to or substantially prejudice the rights of, any person or would be detrimental to good administration”.

In that connection it is necessary to examine the relief which is sought in this case by the Claimant. The relief pleaded by the Claimant in the substituted Statement of Facts and Grounds includes a declaration that the defendant has acted unlawfully by accepting as carbon qualifying actions loft insulation installations involving the self-fabricating method. The relief sought then continues and seeks the following mandatory orders:

“The claimant claims:

(1)

A declaration that OFGEM has acted unlawfully by accepting installations of loft installation which include the bin bag method on insulating the loft hatch as carbon qualifying actions within art.12 of the Order.

(2)

Mandatory orders that:

a.

OFGEM must revoke decisions it has taken pursuant to art.25 of the Order to attribute carbon saving to installations of loft insulation which include the bin bag method of insulating the loft hatch and which were formerly considered to be carbon qualifying actions within art.12 of the Order or carbon saving community qualifying actions within art.14 of the Order.

b.

In relation to such installations, OFGEM must implement §9.33 of its Delivery Guidance (requiring suppliers to ensure that remedial works are carried out if they wish to avoid losing the carbon savings formerly attributed to such installations).

c.

Where remedial works are not carried out on such installations, OFGEM must re-make decisions it has taken pursuant to art.25 of the Order so as not to attribute carbon savings to such installations.

d.

When taking the decisions mandated by art.31(1)(a) of the Order, OFGEM must proceed on the basis that installations of loft insulation which include the bin bag method of insulating the loft hatch are not carbon qualifying actions within art.12 of the Order or carbon saving community qualifying actions within art.14 of the Order.”

The Defendant, through one of its witnesses Mr Fletcher, provides evidence in the following terms as to the issues which would be raised if relief were granted in the form which is sought by the claimant:

“66.

As noted in paragraph 19 above, ECO 2 loft insulation measures have been installed in approximately 100,000 homes at an estimated total cost of around £80m. If the Court were to grant the relief now being sought by the Claimant, energy suppliers would first need to establish in which of these homes the cushion method was used, and this is information that we (and perhaps also the energy suppliers themselves) do not hold. Gaining access to homes for this purpose is likely to be challenging and the cost associated with this number of visits is likely to be high. Assuming that the claimant is correct in its assertions that the cushion method has been used in the majority of cases, then most of those 100,000 homes would be identified as ones for which remedial works were required.

67.

Such remedial works would, on the Claimant’s case, require that the existing insulation installed over the loft hatch cover be removed, and that the loft hatch be reinsulated using HatchThatch or an equivalent proprietary product. Energy suppliers would have to commission teams of installers to carry out these works across the country. It is obvious that this would be a major and expensive undertaking. There would also be practical difficulties, such as the need for the installers to arrange access to all these homes, and also the consent of the householders. It may be that not all householders would be willing to facilitate access for carrying out the works (and, indeed, some householders would not be the same people who were living in the house when the original installation took place – that is especially so for rental properties). It is also unclear how each loft hatch could be re-insulated in any physical circumstances where the installer was unable to install HatchThatch effectively.”

Mr Rogers who is the Head of ECO 2 for the Second Interested Party provides the following evidence in relation to the extent of the Second Interested Party’s activities in respect of loft insulation:

“3.

Loft insulation was just one of several measures that constitute “qualifying actions” under the ECO 2 regime. British Gas installed 68,000 loft insulation measures that contributed to the delivery of its ECO 2 targets. This figure includes approximately 36,000 actions carried over from the previous ECO period (meaning the number of actions actually carried out in the ECO 2 period were approximately 32,000). In addition, a further approximately 26,000 loft insulation measures that were installed by partners paid by British Gas are contributing to its ECO 2 targets.

4.

Loft insulation measures installed by British Gas or its partners resulted in a contribution of 1.446 mtCo2 and £6.7mLTS towards ECO 2 targets. I estimate that the value of the carbon credits British Gas claimed for the measures (and the validity of which are now being called into question by the Claimant) is £56 million. The validity of our carbon credit claims is also important for British Gas’s compliance with the ECO 2 regime. Because of the significant monetary value, and the importance to British Gas of fulfilling our regulatory obligations, we take compliance with the ECO 2 regime very seriously and took careful steps to comply with Ofgem’s requirements.”

Similar observations are made by the energy supplier SSE in a letter to Mr Rogers in relation to the cost implications of revisiting the installations which have been undertaken.

Against the background of this evidence in my view there would be significant and undoubted hardship and prejudice to the energy providers who had participated in the ECO 2 scheme. In a large number of cases many months after the installation of loft insulation has been completed and claimed as a carbon qualifying action, the relief sought would require that installation to be investigated and, potentially, revised (with associated cost implications) as a result of the court’s order. This disruption and cost is in my view a matter to which significant weight would need to be attached alongside the issues associated with delay.

Mr Coppel sought to rely upon the prejudice to customers who would have been in receipt of what he submitted would have been a defective installation. He also sought to minimise what would actually be required in order for there to be compliance with the court order. Whilst there is some substance to his submission in relation to the impact on customers were the court to have been satisfied that the installations were unlawful, in my view the logistical implications of having to reinvestigate many tens of thousands of installations are not to be underestimated. These points also sound to some extent, in my view, in relation to detriment to good administration. In claiming the credit for many tens of thousands of carbon qualifying actions both the Defendant and the energy suppliers have relied upon the legitimacy of the self-fabricated method as a means of conducting a loft insulation installation which qualifies under the ECO 2 scheme. Granting the relief sought would cause considerable disruption to the operation of that scheme upon which reliance had been placed.

Albeit that for the reasons I have expressed above the question of the grant of relief does not arise, nonetheless for all of the reasons which I have set out in brief above, I am satisfied that even had the Claimant demonstrated that there had been illegality in this case it would be inappropriate to grant relief on the basis of the extensive and unexplained delay in bringing proceedings, the substantial hardship and prejudice to the Defendant and the Second Interested Party, as well as the detriment to good administration that would arise if the mandatory relief were granted. At most, in my view, the Claimant would have been entitled to a declaration.

I am satisfied that there is no substance in the Claimant’s Grounds and that this application for judicial review must be dismissed. Even were I wrong in respect of any one of the four Grounds advanced by the Claimant, in the circumstances of this case I would not have been minded to grant the mandatory relief sought by the Claimant, but solely to give relief in the form of a declaration.