🚪 They gave customers misleading sales information.

Sales staff visiting homes or calling customers gave unreliable estimates of what their bills would be if they switched. ScottishPower hadn’t trained or monitored them properly.

💷 They couldn’t justify their different prices.

Customers paid ScottishPower in different ways. Some paid each bill themselves, while others let the company take payments automatically from their bank accounts (using direct debit).

Those who paid each bill themselves were charged more. The rules allowed that extra charge only if it reflected the extra cost of collecting their payments, but ScottishPower hadn’t properly worked out those costs and charged customers more anyway.

🌱 They missed their energy-saving deadline.

A separate law required ScottishPower to provide free improvements, like insulation, to help homes in poorer areas use less energy.

It had done only 70% of the work by the December 2012 deadline, and finished the rest by April 2013.

📞 They failed to serve customers properly.

After ScottishPower moved to a new computer system, customers struggled to get through by phone, more than 300,000 got their final bills late, and complaints took too long to resolve.

1️⃣ The First-tier Tribunal sided mostly with HMRC.

This tribunal hears tax appeals. In February 2022, it ruled that the payments replaced fines, so they couldn’t be deducted. But it allowed £554,013 paid to customers who’d been misled, because that money covered their actual losses.

2️⃣ The Upper Tribunal sided entirely with HMRC.

Both sides appealed the parts they’d lost. In September 2023, the Upper Tribunal ruled that the payments were one package agreed under the threat of fines, so even the £554,013 couldn’t be deducted.

3️⃣ The Court of Appeal sided with ScottishPower.

In January 2025, the Court of Appeal ruled that the ban on deducting fines only covers actual fines. The redress payments weren’t formally fines, so ScottishPower could deduct all £28 million.

A company can face customer claims and a regulator’s investigation over the same problem.

Imagine a case study where your client is about to buy an online retailer, then learns that a recent cyberattack exposed customers’ personal information.

Before the purchase goes ahead, what risks should it check?

→ Identify the harm caused. Which information was exposed, and did it include addresses or payment details? That could expose customers to fraud. Has the attack stopped the retailer taking orders or making deliveries? That could mean lost sales and customers paying for goods they haven’t received. These facts help you identify which legal problems need attention.

→ Identify the relevant regulator. Many sectors in the UK have a designated regulator, like Ofgem for energy suppliers, Ofwat for water companies, and the Financial Conduct Authority for financial services. The Information Commissioner’s Office (ICO) enforces data protection rules, while the Competition and Markets Authority tackles unfair business practices and protects competition. Here, the ICO is relevant because customers’ personal information was exposed.

→ Separate the two risks. Customers could seek compensation if failures to protect their information caused them loss or distress. Separately, the ICO could investigate and fine the retailer. Paying customers wouldn’t automatically end that investigation.

→ Recommend a response and explain the costs. Ask whether the retailer has secured its systems and checked whether it must notify the ICO and affected customers. Find out whether it faces an investigation or customer claims. Include the possible costs of compensation, a fine and security improvements, alongside lost sales, when assessing the purchase.

→ Allow for tax too. As we’ve learned from this story, an ICO fine won’t reduce the retailer’s tax bill. Payments settling customers’ private claims might be deductible, but compensation included in a package replacing a fine probably won’t be. That affects the cost the buyer needs to budget for.

The buyer could offer a lower price or ask the seller for an indemnity – a promise to repay the buyer, pound for pound, for specified costs arising from the earlier breach. That would reduce the buyer’s exposure to a problem that happened before the purchase.

Tax lawyers help businesses weigh tax savings against the risk of an HMRC challenge.

If you’re interested in tax law (or applying to a firm with a strong tax practice), you might be asked to explain why it interests you.

This story gives you something specific to discuss. It shows how understanding the law helps a company work out what it owes and make decisions about its money.

→ Start with what the client needs. A company wants to claim the deductions it’s entitled to, because these reduce its tax bill. But claiming a deduction that HMRC later rejects could leave it owing more tax than expected. Tax lawyers help the company assess that risk before deciding what to claim.

→ Explain the legal work behind the advice. The answer isn’t always found by doing a calculation. ScottishPower’s lawyers had to interpret the tax legislation and examine how previous cases treated fines and business expenses. Different courts reached different conclusions about the same payments. So advising the client meant weighing competing legal arguments and explaining how confident the company could be in claiming the deduction.

→ Explain why that interests you. Pick the part of the work that appeals to you. Perhaps you enjoy examining detailed rules, building an argument from previous decisions or explaining a difficult question clearly. Connect that interest to something you have done in your degree or work, then explain why you want to apply it to business decisions.

→ Connect it to the firm. Research the tax work the firm actually does. Does it advise on transactions, help clients resolve disputes with HMRC, or both? Use a specific matter to explain which work interests you. Linklaters’ work for ScottishPower, for example, gives you a concrete tax dispute to discuss.

In an interview, you could say, “What interests me about tax law is how interpreting a legal rule can directly change what a business owes. ScottishPower’s dispute wasn’t about calculating percentages, but whether its payments could legally be deducted at all. Different courts reached different answers, with a substantial tax saving at stake. I’d enjoy examining those competing arguments and explaining whether the expected tax saving justifies the risk of a challenge from HMRC.”

Then tie this to a specific experience that you have – like your degree or work.

A lawyer needs to look beyond what an arrangement is called to understand how the law treats it.

The question “Why commercial law?” asks you to explain your interest in both business and law. A story like this can help you describe why legal work interests you.

Here’s how to build your answer:

→ Identify a legal question. ScottishPower paid a £1 fine in each investigation. Could its other payments still count as “fines”, even though nobody called them that?

→ Explain how the lawyers had to look beyond the labels. They had to examine why ScottishPower paid the money, what Ofgem had agreed and how previous court decisions applied. The Supreme Court concluded that the payments replaced substantial fines. Calling them “redress” didn’t change their purpose or make them tax-deductible.

→ Explain why that work interests you. Lots of applicants say they enjoy “the intersection of law and business”, which doesn’t tell an interviewer much. Be specific about the part of the work that appeals to you. For example, you might enjoy working out how legal rules apply to a client’s situation, especially when the answer is open to argument. Here, the distinction between a business cost and a punishment affected whether ScottishPower could reduce its tax bill.

→ Connect it to your own experience. If your degree or work has involved weighing competing interpretations, explain what you enjoyed about that and why you want to apply it to clients’ problems.

The takeaway is that lawyers often need to look past what an arrangement is called to what it actually does. Showing you’ve spotted that in a real case tells an interviewer you already think like one.