Millions of households across the UK could be entitled to compensation through legal action which alleges that United Utilities abused their market position and overcharged consumers.
A legal claim has been issued in the Competition Appeal Tribunal against the water company for allegedly breaking competition law by misleading the Environment Agency and Ofwat regarding the number of pollution incidents they cause, being spills and discharges of sewage they made into waterways such as rivers and lakes.
United Utilities supplies water and sewerage services to areas across and the case against the company is brought on behalf of over 5 million customers. United Utilities is one of six water companies across the UK facing collective action legal claims and, if the claims are successful, it is expected to lead to compensation payments of over £800 million.
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Law firm Leigh Day is acting on behalf of Professor Carolyn Roberts, an environmental and water consultant, who is bringing the claims against Severn Trent Water, Northumbrian Water, United Utilities, Anglian Water, Yorkshire Water, and Thames Water on behalf of an estimated 20 million affected customers. Prof Roberts hopes the claims bring about "desperately needed change in the water industry".
She said: “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. 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.”
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 claims argue that customers have been overcharged as a result of the companies’ underreporting.
Zoë Mernick-Levene, head of competition practice and partner at Leigh Day, said it is the first time in English law that legal action is being taken against six of the largest water companies – and anyone who has paid a water bill from United Utilities from April 2020 may be entitled to compensation if the case is successful.
She said: "These claims are being bought on an ‘opt-out’ basis which means individuals do not need to sign up to bring individual claims; instead, everyone who has suffered loss is included unless they actively choose not to be.
"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.”
If the case is successful, it is expected that any compensation would be paid by the relevant water company and its shareholders, not by increasing customers’ bills.
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