Herbert Smith Freehills advises on significant water class action claim

An application for a CPO was brought by Professor Roberts against Severn Trent and five other major water and sewerage companies (WaSCs) in England (together known as the PDs). The claims alleged that Severn Trent had breached competition law, abusing an alleged dominant position (said to arise by virtue of their status as regional monopolists in sewerage services), by allegedly under-reporting the number of pollution incidents on its sewerage network. It was alleged that this enabled Severn Trent to charge higher prices than it would have been permitted to charge if accurate reports had been made.

The case centred on section 18(8) of the Water Industry Act 1991 (WIA). Where a breach of the WIA or an Instrument of Appointment (or 'licence') is an "essential ingredient" of a claim against an appointed WaSC, section 18(8) WIA prevents any claim from being brought unless the remedy sought is available other than by virtue of the breach of the WIA / licence.
 
The Tribunal agreed with the PDs' argument that the misreporting of pollution incidents to regulator Ofwat was an "essential ingredient" of the PCR's claim, and therefore held that there was no independent basis for the PCR's claim for damages, such that section 18(8) WIA operated to exclude the PCR's claim.

The Herbert Smith Freehills team comprised the firm's Disputes and Competition, Regulation and Trade (CRT) teams, including Disputes partner Nusrat Zar, CRT partner Stephen Wisking, senior associates Joe Williams, Sanam Zulfiqar Khan and Naomi Reid, and associate Phoebe Boulton. They worked closely with the Severn Trent team of General Counsel Didar Dhillon, Head of Legal Judith Worrall and Senior Legal Counsel Chris Rivers.

Nusrat Zar commented: "We are delighted with this robust judgment, which draws on recent Supreme Court authority and constitutes an important judgment not just for our client but for the water industry generally."

Severn Trent is a longstanding client of the firm, and has long been recognised as an industry leader when it comes to environmental performance, achieving the Environment Agency's highest four-star rating for the last five years. In recent years the firm has advised Severn Trent on its £1 billion equity raise to fund further investment in infrastructure as well as acquisitions by its renewable energy business, Severn Trent Green Power, as well as advising Severn Trent in the successful defence of an unjust enrichment claim regarding the Environmental Information Regulations 2004.