A UK court has dismissed a class action lawsuit against six water companies, including Thames Water Ltd., over claims they under-reported sewage leaks. The Competition Appeal Tribunal ruled that the case, which alleged the companies misrepresented pollution levels to charge higher prices, could not proceed under the Water Industry Act.
The lawsuit accused Thames Water and its peers—Anglian Water, Northumbrian Water, Severn Trent Water, United Utilities, and Yorkshire Water—of abusing their market position by failing to accurately report pollution incidents. The plaintiffs argued that these companies would not have been able to charge higher rates if they had provided truthful accounts of their pollution.
The court’s decision, published on Friday, stated that such claims were not permissible under UK law. The judges noted that if the law allowed for these allegations, they would have granted permission for the case to move forward.
Meanwhile, Thames Water’s financial future is uncertain as it awaits a decision on a £3 billion emergency loan. This loan is crucial for the company, which is struggling with debt. If the court rules against certain creditors, Thames Water could face temporary nationalization through a process called special administration.
Reducing pollution incidents is a key performance goal for all water companies, as it directly affects the prices they can charge customers. The outcome of this legal battle could have significant implications for the water industry in the UK.