Six water companies face £800m lawsuit for unreported sewage pollution and overcharging customers

The first environmental collective action claim has today been launched against Severn Trent Water: five more are due to follow

A consumer legal claim has today been filed against one of six UK water companies who are accused of underreporting sewage pollution and overcharging customers. This claim comes 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.

Professor Carolyn Roberts, an environmental and water consultant who is leading the claim on behalf of 20 million customers from the six water companies, 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 onto 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 under-reporting at the heart of these claims, water companies have avoided being penalised by Ofwat. I believe this has resulted in consumers being unfairly overcharged for sewage services.’

The claim against Severn Trent Water is the first against six water companies who are all accused of breaching environmental laws by underreporting the number of sewage spills and discharges into UK waterways. Claims against Anglian Water, Northumbrian Water, Thames Water, United Utilities and Yorkshire Water will follow in coming months.

What is Severn Trent Water accused of doing wrong?

Severn Trent Water is accused of not complying with environmental laws and regulators’ reporting responsibilities. This could leave eight million Severn Trent Water customers owed a total of £330 million if the case is won.

All six companies are accused of breaking competition law by misleading the Environment Agency and water company regulator Ofwat about the number of untreated sewage spills and discharges they made into rivers, lakes, the sea and other waterways. Water companies are legally required to report these incidents.

Professor Roberts, who is seeking to represent the 20 million affected customers of all six water companies, claims many sewage pollution incidents have gone unreported. This, she says, has meant performance penalties and fines have not been applied by the regulators. These would have reduced customers’ bills had they been made.

‘Millions of consumers have been paying their water bills on the basis that water companies are meeting their targets, but instead every year water companies let raw or only partially treated sewage into the environment in breach of the rules,’ she said.

Severn Trent Water strongly disagrees with the claim

Severn Trent Water told Consumer Voice it was ‘wrong’ and ‘inaccurate’ to suggest they are misleading its regulators. 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* status for environmental performance from the Environment Agency for the fourth year running.’

Legal team behind the claim

Professor Roberts has instructed the law firm Leigh Day to represent her claim against Severn Trent Water and the five other water companies.

Zoë 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 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.’

The claim against Severn Trent Water was filed today at the specialist competition court, the Competition Appeal Tribunal. The claims against Anglian Water, Northumbrian Water, Thames Water, United Utilities and Yorkshire Water will be filed over the coming months.

Who is eligible for compensation?

Anyone who has paid a water bill to one or more of the six water companies from April 2020 could be entitled to compensation if the case is won. Severn Trent Water customers may be entitled to compensation if they paid a water bill from April 2017. If the case is won, it is expected compensation would be paid by the water company and its shareholders, not by increasing customers’ bills.

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. Severn Trent Water was declared to have exceeded its targets and was not asked to reduce its customers’ bills.

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.