Hiba Mahamadi 04 December 2019

Councils could lose millions in utilities repayments after court ruling

Local authorities could be facing repayments worth millions of pounds to council tenants in excess water charges, after a High Court ruling last week.

The court found Kingston upon Thames RLBC unlawfully over-charged a council tenant for water between 2003 and 2017.

During this period, the authority collected payments for water and sewerage services from its tenants for Thames Water Utilities. But the water company had offered the council a discount on the overall bill payable: 3.5% off the total charges, plus 9.3% off the remaining sum payable. This meant Kingston was paying a reduced sum of money for water bills over this period. 

The tenant, Derek Moss, argued this discount was not reflected in the council’s water bill to tenants. He added the council should only charge him for the water he used as per his tenancy agreement and return the discounted sum. 

The High Court ruled in favour of Mr Moss, noting he has the right to be reimbursed for the extra money paid to the council over the years.

Mr Justice Morgan wrote: “Mr Moss has a right to recover overpayments of charges pursuant to section 150(5) of the 1991 Act and paragraph 10(1) of the Water Resale Order 2006…

“Mr Moss has overpaid the charges which were due under the revised terms of his tenancy agreement”.

The judgement comes after a similar resolution against Southwark LBC in 2016, in which the council was held liable to repay a tenant for excess water charges.

Southwark calculated its tenants had made overpayments worth £28.6m.

The law firm, Deighton Pierce Glynn (DPG), that represented the tenants against Kingston RLBC and Southwark LBC, has said the ruling could see many more council tenants make claims for extra water charges.

A DPG statement read: 'The impact of today’s result could be felt in millions of pounds of refunds to council tenants in Kingston and many other local authority areas.'

DPG solicitor Daniel Carey added the ruling reiterated local authorities’ duty to pass on any discounts negotiated with water companies to tenants.

A spokesman for Kingston upon Thames RLBC said: 'We are considering the outcome with our legal representatives.'

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