Millions could get compensation in £800m legal action against water companies
Millions of households could be in line for compensation after water companies were accused of underreporting pollution incidents and overcharging customers.
Severn Trent is the first company to have a claim brought against it, with cases against Thames Water, United Utilities, Anglian Water, Yorkshire Water and Northumbrian Water expected to follow in the coming months. If successful, the firms could end up paying out over £800million in compensation to more than 20 million customers.
The claims are being brought by Professor Carolyn Roberts, an environmental and water consultant represented by Leigh Day solicitors. She claims water companies have breached competition law by failing to report discharges which would have affected the price they can charge to customers.
The first claim, brought on behalf of eight million people against Severn Trent Water, is estimated to be worth more than £330million. The claims are being brought on an opt-out basis, which means anyone affected is automatically part of it unless they choose not to be.
If successful, customers could be owed around £40 each - in comparison, the average annual water bill in England is £448. But claims such as this can take years to be settled. Leigh Day is bringing its first case against Severn Trent Water to the Competition Appeal Tribunal.
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Professor Roberts said: "Like many others across the country, I have viewed with horror the escalating number of stories in the media regarding the volume of sewage discharged into our waterways and on to our beaches. The population of the UK has a right to expect that our rivers, lakes and seas will generally be clean, except under exceptional circumstances.
"It appears that because of the serial and serious underreporting at the heart of these claims, water companies have been avoiding being penalised by Ofwat. I believe this has resulted in consumers being unfairly overcharged for sewage services."
Water UK said the accusations are "entirely without merit" and that 99% of sewage works are legally compliant. A spokesperson said: "The regulator [Ofwat] has confirmed that over 99% of sewage works comply with their legal requirements. If companies fail to deliver on their commitments, then customer bills are already adjusted accordingly."
A Severn Trent spokesperson said: "This is a highly speculative claim with no merit which we strongly refute. Should pollutions ever occur, they are always reported to the Environment Agency. Any claim to the contrary is wholly and completely wrong.
"Our regulators, the Environment Agency and Ofwat, set strict targets and performance measures that deliver for our customers and the environment. Severn Trent is recognised as a sector leader by both regulators across operational and environmental measures.
"We consistently deliver for our customers, and recently received the highest 4 star status for environmental performance from the Environment Agency for the fourth year running."
Zoe Mernick-Levene, partner at Leigh Day, said: "These claims are hugely significant. Not only is compensation being sought for millions of customers who have and continue to pay higher water bills, but we hope that it will also send a message to water companies that they cannot unlawfully pollute waterways and mislead their regulators without consequence.
"Customers put their trust in water companies, believing that they are correctly reporting these spillages and appropriately treating the sewage so it can safely be returned to the environment. Instead, our client believes they are misleading their regulators and customers are overpaying while England's waterways are suffering as a result."
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