High Court gives River Action right to challenge Ofwat over customers ‘paying twice’

The High Court has granted River Action permission to proceed to a full court hearing in its challenge against Ofwat over customers potentially paying twice under PR24 arrangements. 

The action specifically concerns the PR24 final determination for United Utilities, relating to the funding allocated for wastewater treatment works and pumping stations in and around Lake Windermere.

River Action has claimed Ofwat unlawfully approved enhancement funding from customers without a mechanism to ensure the money will be used solely to improve sewerage services, rather than to bring services into compliance when that should have already happened under past schemes. As a result, customers could pay twice: “First through water bills that should have covered infrastructure maintenance, and again through new hikes aimed at fixing the same problems”.

Moreover, in the challenge, which was filed with support of law firm Leigh Day, River Action said Ofwat relied on hydraulic simulation modelling rather than real-world pollution data, which failed to reflect the true environmental damage; and ignored key evidence of widespread sewage discharges when assessing funding needs.

Ofwat rejects the claims. In a previous statement, a spokesperson said: “The PR24 process carefully scrutinised business plans to ensure that customers were getting fair value and investment was justified. We agree that customers should not pay twice for companies to regain compliance with environmental permits, and have included appropriate safeguards in our PR24 determinations to ensure this which we will monitor closely, taking action if required.”

While the action is specific to United Utilities, the case could have implications for the wider industry.