Court finds housing association not liable in water bill claim

Rochdale Boroughwide Housing (RBH) was found not to be a “water re-seller” in a case in Manchester’s High Court earlier this month, and was therefore not liable to pay compensation.

It comes a year after Southwark Council was ordered to pay tens of millions in compensation to tenants due to its contractual relationship with Thames Water.

The judge found RBH, which has a water contract with United Utilities Water, was not a reseller and instead was simply collecting the bills on behalf of the water company.

This meant it was not legally obliged to pass on savings to tenants, and did not owe any compensation for not doing so.

The case was brought as a counterclaim by tenant Esther Izevbigie who was facing a possession claim from the landlord for rent arrears.

In his judgement, Judge Nigel Bird said: “Although the sum of money involved in the instant case is modest I am told that the determination of the preliminary issue will have an impact on very many other tenants.”

The finding will therefore come as a relief to social landlords fearing a deluge of compensation claims over their billing arrangements.

After the Southwark case, the Local Government Association had sought legal advice on behalf of councils with similar contracts, which feared they would face similar claims.

It is understood compensation claims are currently being lodged against social landlords as a defence to possession proceedings, with many social landlords settling out of court.

Giles Peaker, partner at Anthony Gold Solicitors, said the case could “put the cat among the pigeons a bit” for those seeking compensation.

This is because it shows the simple fact that when a landlord charges for water bills along with rent, this is not enough to make it liable to pay compensation, and a more thorough look at the contracts is necessary.

Stephen Wigley, head of legal and compliance at RBH, said: “We’re delighted that the court has found in our favour and confirmed that RBH is not a water reseller. The judgement provides welcome clarity for RBH, our customers and for the wider housing sector.”