Sewerage firms look set to face class action on sewage discharges

Water and sewerage companies could soon be facing class action at the Competition Appeals Tribunal (CAT) after a consortium of legal interests announced plans to prepare a claim relating to alleged unlawful discharges of raw sewage into waterways.

Law firm Leigh Day has secured a funding package from legal finance expert Bench Walk to pursue an "opt-out’" claim on behalf water customers, which will contend that certain systematic failures relating to sewerage discharges resulted in increased charges to customers, constituting a breach of companies’ dominant position contrary to section 18 of the Competition Act 1998. Under opt-out claims, individuals do not need to sign up; everyone who has suffered loss is included unless they specifically choose to opt-out.

Leigh Day has instructed AlixPartners LLP as economic experts, Professor Peter Hammond as a consultant on the case, and Jon Turner KC, Julian Gregory, and Antonia Fitzpatrick of Monckton Chambers as the counsel team. Professor Carolyn Roberts, a water resource management specialist, is the proposed class representative.

Should they go ahead, the claims will be the first UK collective proceedings claims in the CAT with a strong environmental rationale and impact. The legal parties said that as well as providing individual compensation and justice, opt-out proceedings act as a deterrent to future misconduct.

Other legal experts have already indicated interest in class action against the water and sewerage companies on similar grounds. For instance, corporate and financial wrongdoing specialist Fideres suggested customers could be owed £163m in damages dating back to 2016 as result of the water companies potentially abusing their dominant position in providing an excessively low quality service through underinvestment.