Legal proceedings against six UK water suppliers for alleged underreporting of sewage incidents and overcharging customers by up to £1.5 billion have begun in the Competition Appeal Tribunal (CAT).
Thames Water, Anglian Water, Southern Water, Yorkshire Water, Northumbrian Water and Severn Trent Water (part of Severn Trent PLC (LSE:SVT)) are all accused of passing on the financial burden of environmental mismanagement to their customers.
The claims, brought by Professor Carolyn Roberts via public law firm Leigh Day, were filed in March on behalf of millions of UK residents who, the claimants argue, were overcharged as a result of the companies' failure to properly manage pollution events.
Water companies, which function as effective local monopolies, are regulated by government rules tied to their environmental performance.
This week, the CAT will decide if these cases qualify for collective action under a collective proceedings order (CPO), potentially allowing affected customers to claim compensation.
Leigh Day said: "Water companies face serious allegations, including polluting water sources and passing those costs to customers without proper reporting."
Barrister Julian Gregory told the court that all six companies misled regulators by underreporting pollution incidents, the Guardian reported.
“People care deeply about our rivers, and sewage spills can cause significant harm. As the true extent of spills emerges, public outrage has grown,” he said.
Any potential fines given to Thames Water will only heap further pressure on the London utility as it desperately tries to fend off nationalisation due to its £15 billion-plus debt burden.