26 Apr Hundreds of thousands overcharged for water

A High Court ruling has established that hundreds of thousands of tenants have been overcharged for water and sewerage. Lawyers say that affected tenants will be entitled to refunds running to hundreds if not thousands of pounds.

As reported by the BBC, the test case was brought by Kim Jones, a tenant of Southwark Council. Along with 37,000 other tenants in Southwark, Ms Jones’ tenancy agreement required to pay charges for water and sewerage to her landlord. The amount Ms Jones was required to pay her landlord was significantly more than the amount the landlord was required to pay Thames Water. The High Court ruled that this was unlawful because it breached the Water Resale Orders, which prohibit water and sewerage from being resold at a profit.

Whilst initially criticising the decision, Southwark Council has now announced that it will not appeal and will being repaying to tenants some of the unlawful charges.

Ms Jones’ solicitor, Gareth Mitchell, of Deighton Pierce Glynn, said:

“Thames Water has confirmed that it has similar arrangements with 69 local authorities and housing associations throughout its area covering 375,000 households. For households in occupation since 2001, they will have been overcharged around £700 to £1,000.

Southwark Council’s announcement that it will only make a partial refund to the 37,000 tenants affected within its borough is unacceptable. These are low income tenants for whom this is a significant amount of money. For many years, Southwark concealed from its tenants the true nature of its relationship with Thames Water. It is not only morally unacceptable for Southwark Council to retain these unlawful charges, the legal basis for their approach is doubtful and further litigation is very likely if they do not relent.

As for the other local authorities and housing associations affected by this issue, we are expecting them to make contact with their tenants over the coming weeks and to indicate what arrangements they will be making to repay the unlawful charges.

However, the impact of the judgment does not stop there.

The judge also decided that between April 2002 and April 2010 Thames Water should have billed the owners of rented accommodation for water and sewerage, rather than tenants. Whereas Thames Water’s evidence in the High Court was that throughout this period it had billed and recovered charges from tenants, rather than landlords.

Thames Water has not yet announced what arrangements it will be making to reimburse these tenants, all of whom were incorrectly charged hundreds of pounds each year during the 2002 to 2010 period.”

BBC London TV news report on 25 April 2016 (lead item) see: here.

DPG’s Gareth Mitchell was also interviewed about the case on Vanessa Feltz’s breakfast show on 25 April 2016 at 07:35hrs (35 mins in); with Southwark council’s response at 08.21hrs (1 hour 21 mins in): here.

An article about the implications of the case will appear in the May 2016 edition of Legal Action.

For enquiries about this case please contact: bphillips@dpglaw.co.uk.

Image by Philografy.

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