Six of the UK's largest water companies are facing a class-action lawsuit over allegations of underreporting sewage discharges into rivers and oceans, potentially leading to significant compensation claims.
The collective case, representing over 20 million householders, alleges that companies including Severn Trent Water, Thames Water and United Utilities PLC failed to accurately report sewage spills and pollution incidents to the Environment Agency and Ofwat.
Estimated at £330 million, the first claim targets Severn Trent Water on behalf of its eight million customers.
Subsequent claims estimated at £800 million against other companies are expected to proceed in the coming months.
Professor Carolyn Roberts, an environmental and water consultant, stated that the companies' alleged underreporting could have affected the price they charge customers. "The number of pollution incidents a company reports... are factors in determining the price water companies can charge for their services," Roberts was quoted as saying in The Guardian.
These claims throw a spotlight on the privatised monopolies inherent in the UK’s water utility sector, which underwent privatisation in the late 1980s.
Prior to this, water services were under local authority management. The Water Act of 1989 marked a significant shift, transferring assets and responsibilities to private entities.
Over the years, concerns about transparency, accountability and pricing in these monopolies have been raised.
If the class-action lawsuit brought by Leigh Day succeeds, customers who have paid water bills to the implicated companies since April 2020 could be eligible for compensation.
Partner Zoë Mernick-Levene at Leigh Day commented in The Guardian: “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."
Severn Trent called it “a highly speculative claim with no merit which we strongly refute".
Similarly, Water UK, the industry body, defended the companies, stating that over 99% of sewage works comply with legal requirements.
A Thames Water spokesperson said the company, which has faced an insolvency crisis in recent weeks, is aware of the claims brought by Roberts. “TWUL has engaged cooperatively with Prof Roberts to explain that the threatened claim is without merit. No claim has yet been issued against Thames.”