Court rules in Ofwat's favour in ‘customers paying twice’ case

(by Karma Loveday)

On Friday, the High Court dismissed River Action’s application for judicial review against Ofwat for allegedly allowing some customers to pay twice for infrastructure improvements.

River Action claimed Ofwat acted unlawfully when it implemented its policy that customers must not pay twice. The clean river campaigner said that in effect, some households would pay for infrastructure improvements to achieve environmental compliance, which should have been funded from historic bill payments.

The two specific grounds cited by law firm Leigh Day, which represented River Action, were:

• Ofwat’s approach to implementing its own ‘not paying twice’ policy was unlawful.

• Ofwat’s clawback mechanism to recover funds if water companies misuse customer money is flawed and incomplete.

However, the Court ruled that Ofwat’s approach was lawful because Ofwat’s evidence provided a “sufficient logical basis” for its approach.

An Ofwat spokesperson said: "We welcome the judgment and the finding that our approach was reasonable. The judgment enables us to continue to focus on supporting and overseeing the delivery of the record levels of investment in our 2024 Price Review, to ensure that water companies provide better outcomes for customers and the environment.”

River Action said it would not appeal the decision, preferring to focus on “the major regulatory reform needed to ensure real oversight and enforcement, so water companies are properly held to account and sewage pollution is stopped for good”. The campaign group also said that despite its claim being dismissed, the case has resulted in “important clarity and should result in a better regulatory approach”.