UK water companies discharge sewage into water, protected by monopoly
A specialized firm concludes after conducting its investigation that consumers might be qualified to launch class action against water companies in the UK that are dumping untreated sewage into waterways and beaches
Following an investigation conducted by Fideres LLP, the specialized firm concluded that water companies might be stipulated to compensate their customers with hundreds of millions in fines after uncovering water pollution caused by sewage.
According to economists at the firm, the water companies might be obliged, under British competition law, to pay consumers for polluting the country's waterways and beaches with sewage spillages.
The firm's economists stated that consumers could be qualified to initiate a class action lawsuit against the water companies that are accused of breaching the competition law.
The companies, according to the firm, are not discharging their untreated sewage in a correct manner, adding that homes were "exploited" by the monopoly of the companies.
In a statement, the firm said, “We argue that these discharges constitute exploitative abuses of their dominant position."
“This type of abuse reflects not the setting of excessive prices, but the provision (as a result of underinvestment) of an excessively low quality of service," the statement added.
The economists in the firm argued that they, "estimate that households purchasing UK wastewater services have since 2016 incurred damages of approximately £163m as a result of the water companies abusing their dominant position."
“We also estimate the same companies have charged households more than £1.1bn for sewage removal services, when in fact they have not safely removed that sewage, instead they have simply discharged that sewage into the country’s rivers and onto its beaches,” they added.
A price cap is set on the services by the regulator, Ofwat, since customers often don't have a choice to purchase cheaper or different water services due to the monopoly.
Companies annually verify that their pricing enables them to meet their environmental commitments, including not releasing untreated sewage, among others, however, in case they are unable to do that they have to inform Ofwat.
The firm argued that companies have resorted to decreasing investment, which includes basic commitments, rather than increasing prices which goes against the competition law.