Sunday Mirror

COUNCIL TENANTS LAUNCH WATER THE BIG DRIP OFF

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

- BY DAN WARBURTON

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”.

SUSPECT

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”.

CONTRACTS

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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