A UK court blocked a class action lawsuit over allegations of the under reporting of sewage leaks by six water companies including the debt-laden Thames Water Ltd.
The UK’s Competition Appeal Tribunal dismissed the lawsuit that alleged the six water companies significantly under-reported the pollution they caused. The companies would not have been allowed to charge higher prices if they reported the pollution incidents accurately, the lawsuits alleged.
The ruling, published on Friday, said that the cases were disallowed under the Water Industry Act.
Thames Water’s future financial health hangs in the balance as it waits for the outcome of an appeal by some creditors over whether it can access a £3 billion ($3.9 billion) emergency loan. If the judge rules against the Class A creditors, then Thames could face being taken in to special administration, a form of temporary nationalization.
British Water Companies Fight $2 Billion Lawsuits Over Sewage Pollution
Anglian Water Services Ltd., Northumbrian Water Ltd., Severn Trent Water Ltd., United Utilities Water Ltd. and Yorkshire Water Services Ltd were all part of the case that accused them of abusing their dominant position by under-reporting of pollution incidents and consequently charging higher prices.
Reducing the number of pollution incidents are part of all water firms’ performance commitments, which are linked to the prices they are allowed to charge.
Such claims alleging abuse of dominance were not allowed under the UK law. “If not so excluded, we would have granted a collective proceeding order in each set of proceedings,” the judges said in the ruling.
A call to the lead claimant’s law firm and a LinkedIn message seeking comment weren’t responded to.
Photograph: A overflow pipe releases water into the River Thames. Photo credit: Dan Kitwood/Getty Images
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