Legal Precedent: Over £28,000,000 in compensation paid out by Southwark.

Overview

 

In 2016, a legal case was successfully brought against a Southwark Council on the basis that it had been overcharging its Council tenants for domestic water for many years. This led to Southwark paying out over £28,000,000 in compensation to affected tenants, setting legal precedents which may affect Council & Housing Association tenants throughout the UK. 

 

In short, Southwark had an agreement with Thames Water, whereby it collected domestic water charges from its tenants, but it then kept a significant commission payment before paying Thames Water. This agreement was found to be in breach of the regulations and, with similar agreements between Water Companies and Councils/Housing Associations across the UK, it is believed that as many as 4,000,000 people may be affected.  

 

It is known that some of these Councils & Housing Associations are intending to offer some sort of refund directly to those affected – but please beware before accepting any such settlement, as you may be entitled to claim substantially more than they may offer. So, to find out whether you qualify and what compensation amount you may be entitled to claim on a no-win-no-fee basis, please Register your interest now.

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The Details

 

On 1st April 2001 rules were established to protect consumers (the purchasers) who buy their water or sewerage services from another company (the reseller) instead of directly from a water or sewerage company. Under these rules, any reseller reselling water or sewerage services should charge no more than the amount they are charged by the company supplying the water or sewerage charges, although they are able to charge a small administration fee for doing so.

 

Since 1989, when the water industry was privatised, many Councils and Housing Associations have entered into agreements with water companies to collect charges for water and sewerage services from their tenants, the majority of whom were living in un-metered properties.  

 

In a recent landmark case, the High Court found that a London Council had been overcharging its tenants by not passing on discounts offered to it by the water company who was providing the water supply. The water company had offered the Council an 18% commission for collecting the water charges along with a further 5% reduction for those properties owned by the Council which were unoccupied.

 

The Council believed that it was acting as the agent for the water company and not as a reseller and therefore, did not have to pass on these savings to its tenants. However, the High Court decided this was not the case and that the Council was acting as a reseller of water and thus, any reductions in water rates received by the Council should have been passed on to its tenants.

 

This meant that some 37,000 tenants had been over-charged for water and sewerage by this Council alone. The water company gave evidence that it had similar arrangements with a further 69 Councils and Housing Associations within its coverage area which means that this could affect a further 375000 rented homes just in the London and South East area.

 

We believe that other water companies may have entered into similar arrangements with Councils and Housing Associations in other parts of the country which means hundreds of thousands of tenants could have been overcharged for their water rates nationwide.

 

As a result of this landmark case, we know some Councils and Housing Associations have now changed the way they collect rent. Some have passed the responsibility for collecting water rates back to the water companies, however, they may still be responsible for repaying any over-charged water rates for the period that they were collecting water rates from tenants. Some Councils have written to their tenants offering them a refund. However, it is highly likely that the sums offered to tenants are less than what tenants might be entitled to.

 

What else can be claimed?

 

In addition to any over-charge, we will be able to claim any accrued interest on your behalf.

 

You may also be entitled to an additional sum if you could have been able to have a water meter installed and/or if you were a low income earner and if the water company was offering a reduced price and/or a discount for others with water meters and/or on a low income.

 

What Should I do?

 

If your Council or Housing Association has been collecting Water rates with your rent then you may have been overcharged and you may be entitled to a refund. Register your interest now with Smart Reclaim Services and we will investigate your possible claim for you.

 

If your Council or Housing Association has offered you a refund for over-charged water rates then contact us immediately. If you accept any refund offered by your Council or Housing Association, you may be accepting a lot less than what you are entitled to.