Land­mark case slaps lo­cal au­thor­ity with £28m bill for over­charg­ing more than 40,000 peo­ple for wa­ter. An­other 22 UK areas now face le­gal probe that could cost hun­dreds of mil­lions IN­VES­TI­GATES


MIL­LIONS of hard-up coun­cil ten­ants may have been soaked by their land­lords over wa­ter bills, the Sun­day Mir­ror can re­veal.

Up to four mil­lion could be in line for huge re­funds af­ter it emerged that at least one lo­cal au­thor­ity added wa­ter and sew­er­age charges to rent in an il­le­gal way.

The coun­cil was paid com­mis­sion by a wa­ter com­pany to act as its agent – but failed to pass this on to 40,0000 ten­ants to off­set their bills.

The sys­tem – seen as ef­fec­tively “re­selling” wa­ter – was deemed un­law­ful in a land­mark court case and the coun­cil now faces pay­ing out £28mil­lion in re­funds.

Now ten­ants in nearly two dozen other areas want to know if their own town halls and hous­ing as­so­ci­a­tions have been pulling the same trick.

In a scan­dal that mir­rors PPI mis­selling, we have seen doc­u­ments claim­ing the un­law­ful agree­ments are “com­mon across the coun­try”.

A team of lawyers is cur­rently sift­ing through more than 30,000 claims from cus­tomers stretch­ing across 22 dis­tricts in­clud­ing Birm­ing­ham, Liverpool and York­shire.

The Lo­cal Govern­ment As­so­ci­a­tion says it is “sup­port­ing a num­ber of lo­cal au­thor­i­ties” to make sure they are not over­charg­ing ten­ants.

And some of the UK’s big­gest wa­ter com­pa­nies, while not be­ing ac­cused of wrong­do­ing, have con­firmed they are re­view­ing the “im­pact on their busi­nesses”.


Ben Hawkins, of the group ac­tion WaterClaimsUK, said lo­cal au­thor­i­ties and hous­ing as­so­ci­a­tions were try­ing to ig­nore or play down the is­sue.

He said: “We have un­earthed a na­tion­wide prac­tice of large so­cial hous­ing land­lords, which in­cludes coun­cils and hous­ing as­so­ci­a­tions, who could be act­ing un­law­fully.

“We sus­pect coun­cils are try­ing to brush the is­sue un­der the car­pet and hope it goes away.

“Thou­sands of peo­ple are look­ing at join­ing po­ten­tial group ac­tion against so­cial land­lords who po­ten­tially un­law­fully over­charged them. It could be mas­sive.”

Le­gal ex­perts say some of the most vul­ner­a­ble ten­ants have been hit with bloated bills in a na­tion­wide problem.

Some may even have been evicted from their homes af­ter the over­charg­ing forced them into ar­rears.

So­lic­i­tors are now pre­par­ing a US-style class ac­tion against coun­cils amid fears as many as four mil­lion Brits could be af­fected.

And up to 1,000 coun­cils and so­cial hous­ing com­pa­nies could be forced to re­pay huge amounts for de­ceiv­ing ten­ants. It fol­lows a land­mark le­gal rul­ing that South­wark Coun­cil, the au­thor­ity which runs a bor­ough in South Lon­don, had il­le­gally over­charged ten­ants for wa­ter.

In a case where ten­ants were headed up by self-em­ployed painter and dec­o­ra­tor Kim Jones, the High Court was told the coun­cil had col­lected wa­ter bills from ten­ants on be­half of Thames Wa­ter.

But it still over­charged ten­ants by the amount of com­mis­sion it had re­ceived – plus an al­lowance given for empty homes – which added up to 22.1 per cent of the to­tal charge.

The judge said the coun­cil had con­tra­vened the 2006 Wa­ter Re­sale Or­der and had ef­fec­tively “bought and resold wa­ter and sewage ser­vices”.


Coun­cils are try­ing to brush it un­der the car­pet but it’s mas­sive BEN HAWKINS OF GROUP AC­TION WATERCLAIMSUK

The coun­cil claimed the ex­tra money was put back into its ser­vices.

Stephanie Cryan, South­wark Coun­cil’s deputy leader and cab­i­net mem­ber for hous­ing, has claimed Thames Wa­ter had around 70 sim­i­lar con­tracts in Lon­don and such agree­ments were “com­mon” else­where.

Al­ready a le­gal team rep­re­sent­ing coun­cil ten­ants say they are in­vesti-


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