What is the legal claim against water companies, how can I join it and will I get compensation?

Six English water companies are facing legal action over allegations of underreporting pollution incidents and overcharging customers.

If the cases are successful, it could mean the companies paying over £800 million in compensation to its customers.

The action is being taken against Severn Trent Water, Thames Water, United Utilities, Anglian Water, Yorkshire Water and Northumbrian Water - companies which together serve more than 20 million customers.

So what do we know about the legal action so far - and could you be in line for compensation?

• What is the case about?

The six companies are facing legal collective action for allegedly abusing their dominant market position.

The claims centre on how customers are charged for the waste water and sewage that is removed from their properties by the water companies.

The companies are all accused of underreporting the number of times they cause pollution incidents by spilling or discharging sewage into waterways in breach of environmental rules.

That, according to the claim, means that customers were “unfairly overcharged” for wastewater services, and that had sewage discharge reporting been accurate it would have lowered customer bills. 

The companies facing legal action are Anglian Water, Severn Trent Water, Thames Water, United Utilities, Yorkshire Water and Northumbrian Water.

The first claim against Severn Trent Water is estimated to be worth more than £330m alone.

Further claims will be brought against the other companies over the coming months, in what the law firm Leigh Day claims is the "first environmental collective action case of its kind".

• Who is bringing the case?

Prof Carolyn Roberts, an environmental and water consultant represented by Leigh Day, is bringing the claims on behalf of more than 20 million household customers.

She claims these water companies have broken competition laws by misleading the Environment Agency and the regulator Ofwat.

Prof Roberts said: “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 on to our beaches.

“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 underreporting 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.”

• Who could be eligible for compensation?

If the claim is successful against any of the companies, anyone who has paid a water bill to it since April 2020 may be entitled to compensation.

The exception is Severn Trent, against which claims are being taken back to April 2017.

You can check which water company supplies your property by entering your postcode here.

Should the claims be successful, the named account holder will be the primary person who will be able to make a claim for compensation.

If successful, solicitors Leigh Day say they expect any compensation to be paid by the relevant water company and its shareholders - and not simply by raising customer bills.

• If I rent my home, can I claim for compensation?

Yes - tenants who are the named account holder for their water bill would be included in a claim. 

If a tenant has paid for their water bill as part of a rent or a service charge - for example, social housing tenants - then they should also be able to make a claim for compensation.

• If I live in student accommodation, can I claim for compensation?

Potentially. You may be included if you live in off-campus accommodation and your rental agreement covers most or all of the calendar year (ie 50-52 weeks per year). 

You will likely not be included in these claims if you live in on-campus accommodation, accommodation provided through your university, or if you cannot stay in your accommodation over university holidays, and the normal facilities found in a home are provided by your university or another service provider.  

• How do I join the legal claim against the water companies?

The legal action is being taken on an opt-out basis, meaning that anyone who falls under the class definition - ie being a bill-payer to one of the named companies - would be automatically included.

If a claim against your water company is successful, you would be eligible for compensation from any settlement that is awarded.

Prof Roberts said there are no legal fees to pay to be part of the claim, and people do not face any financial risk by being part of the group.

She has secured third-party funding to cover her costs to bring the claims, and has specialist insurance to cover the proposed defendants’ costs if the claims are unsuccessful.

• How much compensation could I potentially receive?

If the claims are successful, the exact amount consumers will be entitled to will be determined by the Competition Appeal Tribunal (CAT).

Prof Roberts is seeking compensation for all customers falling within the proposed classes who have been affected by anti-competitive behaviour by the six water companies.

If the CAT approves Prof Roberts as the class representative in these claims, it will be her decision whether to accept any proposed settlements. She will also be responsible for keeping members up-to-date on the progress of the claims.

The combined total sum being sought on behalf of all proposed class members is hundreds of millions of pounds, and could be as high as £800m.

If the proposed claims are successful, anyone who has not opted-out will be able to seek a payment from the damages awarded.

• What have the water companies said about the legal claims?

The individual water companies have not responded individually, given the ongoing legal action.

But a spokesman for their industry body, Water UK, said: “This highly speculative claim is entirely without merit.

"The regulator has confirmed that over 99% of sewage works comply with their legal requirements.

"If companies fail to deliver on their commitments, then customer bills are already adjusted accordingly.”

• How long will the claims take?

Legal proceedings can take a long time, and the duration of the claims will depend on decisions taken by the Competition Appeal Tribunal and the various parties to the claims.

It is estimated it will take at least a few years for the legal proceedings to reach a conclusion.

If and when money becomes available, people will be notified about how to claim a payment, said Leigh Day.

To find out more about the claims and to keep updated click here.

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