The UK’s six biggest water firms are facing legal action over claims they underreported pollution and overcharged customers in a move which could result in hundreds of millions of pounds in compensation.
Severn Trent is the first to face the action on behalf of 8 million customers, with claims against the other firms expected in the coming months.
Thames Water, United Utilities, Anglian Water, Yorkshire Water and Northumbrian Water are all set to have cases brought against them.
The claims allege the water companies have breached competition law by failing to report discharges, something which would have affected the price they can charge to customers.
Trade body Water UK responded by saying the accusations were “without merit”.
The claims are being brought by Professor Carolyn Roberts, an environmental and water consultant. She is being represented by Leigh Day Solicitors in the first environmental collective action of its kind.
The claims, which are being brought on an opt-out basis, meaning all water bill payers are automatically part of it unless they actively choose not to be, will first need to be considered by the Competition Appeal Tribunal in a process can take around a year.
Professor Roberts said: ”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 [the regulator] Ofwat”.
“I believe this has resulted in consumers being unfairly overcharged for sewage services.”
Severn Trent have responded by calling the claim “highly speculative with no merit”.
“Should pollutions ever occur, they are always reported to the Environment Agency. Any claim to the contrary is wholly and completely wrong”, the company said.
“Our regulators, the Environment Agency and Ofwat, set strict targets and performance measures that deliver for our customers and the environment. Severn Trent is recognised as a sector leader by both regulators across operational and environmental measures.
“We consistently deliver for our customers, and recently received the highest 4* status for environmental performance from the Environment Agency for the fourth year running.”