Water companies have been consistently under-reporting the number of times they cause pollution incidents and overcharging customers as a result, according to legal firm Leigh Day, which is bringing a collective case against Severn Trent Water, Thames Water, United Utilities, Anglian Water, Yorkshire Water and Northumbrian Water.
Professor Carolyn Roberts, an environmental and water consultant represented by Leigh Day, is bringing the claims on behalf of more than 20 million household customers. The first claim alone, against Severn Trent Water, is brought on behalf of 8 million customers with an estimated value of more than £330m. If the six claims are successful, they are expected to lead to compensation payments of over £800m.
In May, Water UK, which represents England's nine water and sewage companies, promised to undertake a huge modernisation of England's sewer system following concerns over repeated sewage spills.
Roberts alleges that the six water companies have been breaking competition law by misleading the Environment Agency and Ofwat about the number of pollution incidents – discharges or spills of untreated sewage into rivers, lakes, coastal areas and other waterways.
Water companies are required to report such incidents as part of their legal duties and responsibilities, but according to Leigh Day, many pollution incidents have gone unreported.
The number of pollution incidents a company reports to regulators has an impact on determining the price water companies can charge for their services.
Roberts argues that, if the water companies had correctly reported the number of pollution incidents, performance penalties would have been applied and this would have reduced how much customers were charged.
A spokesperson for industry body Water UK said: "This highly speculative claim is entirely without merit.
"The regulator has confirmed that over 99 per cent of sewage works comply with their legal requirements. If companies fail to deliver on their commitments, then customer bills are already adjusted accordingly."
Anyone who has paid a water bill from one or more of these water companies from April 2020 may be entitled to compensation if the case is successful, while customers of Severn Trent Water may be entitled to compensation if they paid for a water bill from April 2017.
Compensation is being sought through competition opt-out collective proceedings: customers who have suffered loss are included automatically unless they specifically choose not to be.
"Like many others across the country, I have viewed with horror the escalating number of stories in the media regarding the volume of sewage discharged into our waterways and onto our beaches," Roberts said.
"The population of the UK has a right to expect that our rivers, lakes and seas will generally be clean, except under exceptional circumstances.
"It appears that because of the serial and serious under-reporting at the heart of these claims, water companies have been avoiding being penalised by Ofwat. I believe this has resulted in consumers being unfairly overcharged for sewage services."
