Four new legal claims against UK water companies accused of overcharging millions of customers 

Lawsuits against Anglian Water, Northumbrian Water, United Utilities and Yorkshire Water follow an earlier claim against Severn Water

Millions of household customers across the UK could be entitled to compensation following the latest round of lawsuits issued against four water companies who are accused of abusing their market position and overcharging consumers.   

Legal claims have been filed in the competition court against Anglian Water, Northumbrian Water, United Utilities and Yorkshire Water. The claims say the companies have broken competition law by misleading the Environment Agency and Ofwat about the number of sewage spills and discharges into UK waterways such as rivers and lakes.

These claims follow the claim against Severn Trent Water in August 2023. A claim against Thames Water is expected to be filed in the new year. 

Professor Carolyn Roberts, an environmental and water consultant, and law firm Leigh Day say water company customers could be owed compensation payments of more than £800 million if successful.

Professor Carolyn Roberts said: 

‘In England and Wales there is growing anger about the state in which sewage discharges leave our rivers and beaches. I hope that the legal claims I am bringing on behalf of 20 million customers could be the start of desperately needed change in the water industry.’

These claims come at a time when water companies are planning to increase household bills to pay for the cost of tackling the sewage crisis and the impact of climate change.

Water companies accused of underreporting sewage spills

The number of pollution incidents a company reports to regulators is a key factor in determining the price they can charge consumers for their services. The legal claims argue that customers have been overcharged as a result of the companies’ underreporting.   

‘Water companies are required to report pollution incidents accurately as part of their legal duties and responsibilities, but it appears many such incidents go unreported,’ Roberts said.

‘If these companies had correctly reported the number of pollution incidents, Ofwat would have applied performance penalties, reducing how much these companies could charge their customers. 

‘Instead, customers have been, and continue to be, overcharged, and England’s waterways continue to be polluted.’ 

First environmental collective action cases

These are the first collective action cases where the competition abuse focuses on compliance with environmental laws and reporting responsibilities to regulators.  

Zoë Mernick-Levene, head of Competition Practice and partner at Leigh Day, said:  ‘For the first time in English law, legal action is being taken against six of the largest water companies, on behalf of more than 20 million household customers.’

Water bill payers could be entitled to compensation

Anyone who has paid for a water bill to one or more of these water companies from April 2020 may be entitled to compensation if the cases are successful. Severn Trent Water customers may be entitled to compensation if they paid for a water bill from April 2017. 

All qualifying water company customers will be automatically included in the claim for free unless they follow specific steps to opt out.

‘As well as providing individual compensation and justice, opt-out proceedings also act as a deterrent to future misconduct, as companies know that consumers can act collectively to hold them to account for any rule breaking,’ Mernick-Levene said.

If the cases are successful, it is expected that any compensation would be paid by the relevant water company and its shareholders. 

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Industry body say claim is ‘without merit’

A spokesperson for Water UK, the trade association for the water industry, 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.”

Anglian Water, Northumbrian Water, United Utilities and Yorkshire Water have been asked to comment. Anglian Water declined to comment.

A Northumbrian Water spokesperson said: ‘We have some of the fewest pollution events in the sector and have retained the Excellent or Good rating from the Environment Agency in each of the last three years. This is a highly speculative claim with no merit which we strongly refute. Our regulators, the Environment Agency and Ofwat, set strict targets and performance measures that deliver for our customers and the environment.’

A Yorkshire Water spokesperson said: ’We are aware of an alleged claim being pursued by Leigh Day solicitors. Given the nature of the proposed proceedings, it would be inappropriate for us to comment any further.’

Water companies to reduce bills by £150m for missed targets

Water company regulator Ofwat announced in October last year that most water companies will be hit by financial penalties because of missed targets. Eleven companies were asked to reduce customers’ bills by £150m in 2023-2024 due to missed targets for pollution incidents, internal sewer flooding and water supply interruptions.

The Environment Agency is currently investigating all water companies for ‘widespread and serious non-compliance’ at waste water treatment works that discharge into English waters. This investigation has been underway since 2021 when checks by the Environment Agency and Ofwat led to water companies admitting they could be releasing banned sewage discharges into rivers and watercourses.