Six water companies accused of overcharging customers in England by up to £1.5bn

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Six water companies in England have been accused of overcharging customers between £800mn and £1.5bn by under-reporting the full scale of their sewage pollution, in a case that could pave the way for bill payers to receive hundreds of millions of pounds in refunds.

In a competition appeals tribunal on Monday, lawyers for Carolyn Roberts, a former professor and environmental consultant, accused the privatised companies of abusing their monopoly position to mislead regulators over the amount of sewage they were discharging into rivers since 2015.

Roberts alleges that Thames Water, Yorkshire Water, Anglian Water, Severn Trent, Northumbrian Water and United Utilities, were as a result able to charge customers higher bills than they would have been allowed to if they had provided the regulators with a true picture of their sewage pollution.

The claim marks the first US-style class action lawsuit against water companies in England and is being brought under rules introduced by the Consumer Rights Act 2015, which enabled a single individual to bring an antitrust claim on behalf of many millions of affected customers. The law allows individual customers to be automatically included in any litigation unless they opt out, but the tribunal must first permit the class action to go ahead.

It is one of a number of legal challenges faced by water companies and the government as public anger mounts over a mixture of storm water and raw sewage pouring into rivers and coastal waters, threatening human and environmental health.

The Environment Agency is also investigating potential illegal discharges at more than 2,000 sewage treatment works across England and Wales, while Ofwat is weighing further action against water companies over concerns that they might have breached regulations at their plants.

Julian Gregory, acting for Roberts, told the tribunal that the six companies had misled both Ofwat and the Environment Agency by significantly or systematically under-reporting the number of sewage discharges from their treatment works and combined sewer overflows from 2015 onwards.

He said that all the water companies were monopolies that were not subject to any competitive pressures to provide sewerage services to the public. “Sewage spills pose a threat to wildlife, the environment and public health,” said Gregory.

“Carolyn Roberts estimates across the six water companies customers may have been overcharged £800mn to £1.5bn,” he said.

Water companies are required to report their own sewage and storm water outflows but the rollout of event duration monitors, which typically measure the frequency but not the volume of sewage, was only completed last year. About 7,000 emergency overflow pipes are yet to have them installed.

Water UK, the industry body, 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 bills will automatically be reduced.”