Sewage lawsuit could lead to payout for millions of consumers – are you eligible?

A UK sewage treatment plant with pound coins overlayed (images: Getty Images)

Several water firms serving millions of UK households are facing a collective legal claim for allegedly overcharging their customers. Here’s everything you need to know about the legal action and what compensation you could be due.

The six biggest water and sewerage companies in England could have to fork out to consumers for allegedly misleading regulators over the number of pollution incidents they have caused. Alongside national inflation statistics, water firms’ environmental performance is a key metric that’s used to set how much bills can go up by each year. So, if they’ve fudged the figures as has been alleged, they may have overcharged their customers.

The six firms facing the collective action are:

  • Anglian Water
  • Northumbrian Water
  • Severn Trent
  • Thames Water
  • United Utilities
  • Yorkshire Water

As with all class actions, such as the ongoing overcharging lawsuit facing EE, O2, Three and Vodafone, there are no guarantees you will receive a payout. But, given you don’t have to pay a penny to get involved, it’s worth keeping an eye on and opting in for compensation (more on this below).

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Who’s running the legal action?

The collective action has been brought by Professor Carolyn Roberts through law firm Leigh Day. Professor Roberts is a water and environment consultant who specialises in water resource management.

With the help of the law firm, the scientist is seeking £800 million in compensation. Together, they claim six water companies who deal with wastewater have infringed competition law.

Given water companies hold a monopoly over the areas and regions they serve, it’s unlawful for them to abuse their dominant positions. Charging excessive prices and misleading regulators – in this case, the water regulator Ofwat – are two examples of how water firms could break the law, and form the crux of Professor Roberts’s claims.

She argues the six water companies in question have all “significantly underreported” the number of pollution incidents they have caused since 1 April 2015. A pollution incident can be the spillage of untreated sewage into rivers, lakes and coastal areas. In doing so, not only might they have misled the regulators – Ofwat and the Environment Agency – they may also have overcharged their customers.

This is because Ofwat uses reported pollution statistics to work out if water firms are meeting their environmental targets. If they fail to meet them, they face financial penalties that are paid back by reducing household water bills. But if they outperform them, they can charge extra for their services.

At the moment, the claims are in their early stages. Professor Roberts is in the process of filing them with the Competition Appeal Tribunal – a specialist court in London that deals with this sort of legal action. You can keep tabs on the cases’ progress by signing up for updates on the My Water Case website that Leigh Day has set up.

Am I eligible to take part in the legal action?

To be eligible to take part in the collective claim, you have to have paid for wastewater services from at least one of the six firms between 1 April 2020 and the present day (or 1 April 2017 to now, in the case of Severn Trent). You will also have to have been living in the UK at the time.

Renters can get involved, as well as students living off-campus – so long as their rental agreement covers most of the calendar year. Any compensation can be claimed by the named account holder (although renters will be able to claim if their landlord includes water in their rent or service charge).

If your water firm isn’t currently listed in the action, there is a chance it could be at a later date. Leigh Day says Professor Roberts’s evidence suggests the underreporting of pollution incidents is “industry-wide”.

How much compensation could I get?

You will only be compensated if the legal case is successful. At the moment, it could be years before that happens, as the cases have not yet been given permission to proceed in the courts.

Look After My Bills has asked Leigh Day for estimates on how much people could receive. They have told us that the precise figure will depend on who your supplier is/was and how long you’ve been/ were served by them for.

Do I need to do anything to get involved?

At the moment, you don’t need to do anything to be included in the legal action. The claims are being conducted on an ‘opt-out basis’. So, unless you say you don’t want to be involved, you’ll automatically be included.

Again, if you want to opt out, you don’t have to do anything at the moment. If the legal action is allowed to go ahead, there will be a set deadline for opting out. Either way, the best thing to do is to sign up for updates from the My Water Case website.

Will it cost anything to take part in the legal action?

It will cost you absolutely nothing to take part in the collective case. The legal costs are being covered by Professor Roberts, who has received donations and specialist insurance to fund her cases.

Should the water firms have to pay out compensation, Leigh Day says it expects they and their shareholders will pay the penalty – not consumers.