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Court dismisses London council’s appeal over water charges ruling
The Court of Appeal has dismissed an appeal from Kingston Council after it was ruled to have overcharged tenants when supplying water, in a decision that could have major implications for social landlords.
In a judgement handed down yesterday, judges rejected the appeal brought by Kingston Council, citing a previous landmark case on the matter which established that potentially hundreds of thousands of social housing tenants had been overcharged for their water supply dating as far back as 2002.
The south-west London authority could now be liable to pay out millions in compensation to its 4,600 tenants.
Lawyers involved in the proceedings said the latest ruling could be the “last word” on the long-running saga, which considered whether the landlord had overcharged tenants for water by not passing on discounts they had arranged with Thames Water.
The court unanimously ruled that the council was a water reseller rather than agency, meaning the authority failed unlawfully to pass on discounts to tenants.
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Kingston Council had appealed the High Court’s 2019 ruling that discounts the local authority received from Thames Water had not been passed on to tenants and the council was therefore in breach of the Water Resale Orders 2001 and 2006.
But Court of Appeal judges said there is “no real doubt” that Thames Water had supplied water to the council rather than directly to Kingston’s tenants and added that “on the main issue raised on this appeal, the judge was right”.
The judges cited a similar previous ruling from 2016, Jones v Southwark, which saw Southwark Council agree to repay 41,000 tenants a total of £41m.
At the time of the Southwark case, Thames Water had similar arrangements with 70 councils and housing associations, with social landlords across the country also thought to have deals with water companies.
Some councils had been pinning hopes on a successful challenge to the precedent set by the Southwark case.
Law firm Deighton Pierce Glynn, which represented the tenant at the time of the 2019 ruling, said: “The judgement appears to be the last word on councils’ attempts to portray the contractual arrangements they had in place with Thames Water as a type of agency arrangement.
“Some local authority tenants have now claimed for repayment of excess water charges in light of the Jones judgment, and this pressure is likely to increase following today’s court of Appeal judgment.”
Deighton Pierce Glynn began representing local authority tenants when they noticed large numbers being evicted due to non-payment of water rates, after water charges ceased to be covered by housing benefit.
Eviction would not have been available had Thames Water been directly supplying the tenants, the firm said.
A spokesperson for Kingston Council said: “We are aware of the judgement and this has brought clarity to the situation.
“We are now considering the response to the ruling and the actions we need to put in place. We will provide further information soon.”
