Severn Trent faces legal action over pollution leak claims

A legal claim has been issued in the Competition Appeal Tribunal against Severn Trent Water for allegedly breaking competition law by misleading the Environment Agency and Ofwat regarding the number of pollution incidents they cause.

This includes spills and discharges of sewage the company allegedly made into waterways such as rivers and lakes which it is feared is causing damage to the environment.

Severn Trent Water is one of six water companies across the UK set to face collective action legal claims. Law firm Leigh Day is acting on behalf of Professor Carolyn Roberts, an environmental and water consultant, who is bringing the claims against Severn Trent Water, Northumbrian Water, United Utilities, Anglian Water, Yorkshire Water, and Thames Water.

The law firm claims that more than 20 million affected customers could be liable for compensation. The BBC has reported that it could result in customers on average receiving £40 each, but said that the process could take years and there is no guarantee of success. They added that trade body Water UK said the accusations were "without merit". Severn Trent has refuted the claim and said it is “highly speculative”. You can see their full response below.

The number of pollution incidents a water company reports to regulators is a key factor in determining the price they can charge consumers for their services. The claims argue that customers have been overcharged because of underreporting.

The value of the claim against Severn Trent Water is estimated to be over £330 million and Law Day says that the six claims against all the water companies are expected to lead to compensation payments of over £800 million in total, if successful.

Severn Trent Water supplies water to Birmingham along with areas from the Bristol Channel to the Humber, and from the Welsh border to the East Midlands and Law Day say the case against the company is brought on behalf of 8 million customers.

The claim is ‘opt-out,’ meaning individuals do not need to sign up for the claim. Law Day said customers affected will automatically be included in the claim unless they specifically choose to opt-out. Customers will only need to come forward at the compensation stage if the claims are successful.

If the case is successful, it is expected that any compensation would be paid by the relevant water company and its shareholders, not by increasing customers’ bills.

What law firm Leigh Day has said about legal action against Severn Trent

A spokesperson for the law firm said: “This will be the first collective action case where the competition abuse focuses on compliance with environmental laws and reporting responsibilities to regulators. Anyone who has paid a water bill from Severn Trent Water from April 2017 may be entitled to compensation if the case is successful.”

Severn Trent has responded to the legal action refuting the claim

A Severn Trent Spokesperson said:  ‘This is a highly speculative claim with no merit which we strongly refute. Should pollutions ever occur, they are always reported to the Environment Agency. Any claim to the contrary is wholly and completely wrong.

“Our regulators,  the Environment Agency and Ofwat,  set strict targets and performance measures that deliver for our customers and the environment.  Severn Trent is recognised as a sector leader by both regulators across operational and environmental measures.  We consistently deliver for our customers,  and recently received the highest 4* status for environmental performance from the Environment Agency for the fourth year running.”