You are viewing 1 of your 1 free articles
Social landlords could face huge bills following High Court water charges ruling
Social landlords face potentially huge compensation bills after a High Court ruling against a London council over water charges, a law firm involved in the case has said.
Mr Justice Morgan ruled in a judgement handed down on Friday that Kingston Council was liable to tenants for water overcharges dating back to 1 April 2002.
Law firm Deighton Pierce Glynn (DPG) said this could mean that any local authorities and housing associations that had acted unlawfully over the charges would have to pay millions of pounds in refunds to tenants.
It said the case was a test of whether landlords acted lawfully in failing to pass on to tenants any discount or commission agreed with water companies.
The ruling is the latest in a long-running saga regarding social landlords allegedly overcharging tenants for water bills.
READ MORE
Council taken to court over allocation scheme that ‘removes homeless families from housing register’
It began in 2016, when a judge found that Southwark Council had been buying water from Thames Water and reselling it to tenants without passing on the savings it made through the arrangement – meaning it was charging more commission than legally allowed when collecting water rates.
Southwark Council has since agreed to repay 41,000 tenants a total of £28.6m.
Social landlords around the country are thought to have had water reselling arrangements with water companies, with Thames Water telling the court at the time that it did so with 70 councils and housing associations.
In reaching this latest conclusion, the judge adopted the same reasoning as in the Southwark case, Jones v Southwark London Borough Council, which established that tenants had been overcharged for water and sewerage over decades because the discounts were not passed on to them in breach of the Water Resale Orders 2001 and 2006.
Some local authority tenants have now claimed for repayment of excess water charges and DPG said this pressure was likely to increase following today’s judgement in the Kingston Council case.
DPG solicitor Daniel Carey, who acted for claimant Derek Moss, a Kingston Council tenant, said: “I am pleased that the court has recognised once again that local authorities should have been passing on to their tenants the group discounts negotiated with water companies.
“Although this comes too late for the many tenants evicted for non-payment, it does provide a route to compensation for the many tenants who were overcharged.”
The Local Government Association sought legal advice on behalf of other councils following the Southwark case. While in 2018 Barking & Dagenham Council told Inside Housing it was supporting a challenge to the ruling.
In 2017, the High Court ruled that Rochdale Boroughwide Housing was not liable to compensate tenants for water bills because it was not a water reseller and instead was simply collecting the bills on behalf of the water company.
