Significant strides were made today in the first environmental class action in the United Kingdom’s history, as the Competition Appeal Tribunal (CAT) considered claims involving six water companies.
Professor Carolyn Roberts, the proposed class representative, alleges that these six companies have overcharged their customers by an amount ranging from 800 million to 1.5 billion pounds due to their significant underreporting of the actual extent of sewage pollution affecting rivers and waterways.
Roberts claims that the firms have exploited their dominant position to mislead regulatory bodies regarding the volume of sewage discharged from their facilities over the past decade. Consequently, the companies—Thames Water, Yorkshire Water, Anglian Water, Severn Trent, Northumbrian Water, and United Utilities—were able to impose inflated charges on customers, which would not have been permissible had they accurately represented the reality of their sewage pollution to the regulators.
The pricing framework overseen by Ofwat essentially creates a financial incentive for water companies to be less than forthcoming about sewage contamination, simply because they are penalized for incidents. According to the PCR, the six companies have deceived both Ofwat and the Environment Agency by underreporting the frequency of sewage discharges from their treatment facilities and combined sewer overflows since at least 2014.
By providing regulators with inaccurate information regarding the extent of sewage discharges, they were permitted by Ofwat to impose elevated charges on customers, which would not have been the case had they disclosed the sewage pollution truthfully. An analysis of data from Thames Water alone implied that the company may have neglected to report over 6,000 instances of raw sewage discharges.
