Six English water companies are to face legal action over allegations of underreporting pollution incidents and overcharging customers.
Severn Trent Water, Thames Water, United Utilities, Anglian Water, Yorkshire Water and Northumbrian Water could end up paying over £800 million in compensation to more than 20 million customers if the cases are successful.
Professor Carolyn Roberts, an environmental and water consultant represented by Leigh Day Solicitors, claims these water companies have broken competition laws by misleading the Environment Agency and the regulator Ofwat.
She alleges they have been underreporting the number of sewage discharges, resulting in customers being “unfairly overcharged” for wastewater services, and that had sewage discharge reporting been accurate it would have lowered customer bills.
The first claim, brought on behalf of eight million people against Severn Trent Water, is estimated to be worth more than £330 million.
Further claims will be brought against the other companies in what Leigh Day said is the first environmental collective action case of its kind.
Water UK said the accusations are “entirely without merit” and that 99% of sewage works are legally compliant.
Prof 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.”
Anyone who has paid a water bill to one or more of these companies from April 2020 – or April 2017 for Severn Trent Water customers – may be entitled to compensation if the claims are successful.
Leigh Day is seeking money for customers on an opt-out basis, meaning people only have to come forward to claim their compensation if the case is successful.
It is bringing Severn Trent Water to the Competition Appeal Tribunal and will issue five further claims against the other water companies over the coming months.
If successful, solicitors expect any compensation to be paid by the relevant water company and its shareholders, not by raising customer bills.
A Water UK spokesperson said: “This highly speculative claim is entirely without merit. The regulator 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.”
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.”