Occasionally Pondered Questions
Because FAQs tend not to be.
How does Ofwat implement financial penalties
If a water company is found guilty of a breach of civil agreements, such as failure to meet performance targets, any resulting financial penalties are paid by reducing future customer bills.
What is JFW's Objective
JFW's objective is to stop Southern Water's unlicensed sewage dumping.
How does Ofwat implement fines
If a water company is found guilty of criminal behaviour and fined, the fine is paid using the portion of money originating with customers that was originally intended to be used to pay shareholders dividends. This is a pot of money known as retained earnings.
What is JFW's Strategy
JFW's strategy is to prove Southern Water is acting illegally in consumer law.
Why advocate for a class action
The problems with water companies are clearly systemic and typically impact large numbers of customers. They are therefore well suited to class type legal action in which a group of customers take part in joint legal action.
What is preventing a class action
Currently, the Water Act does not allow individuals or classes of customers to take legal action against water companies. An ouster clause (Section 18(8)) prevents this.
Might a class action be possible in the future
Yes. If a precedent is set that gives permission to use a class type action against water companies. Prof. Carolyn Roberts is hoping for a Supreme Court Precedent in favour of the Consumer Rights Act 2015's collective provisions being applied against water companies. These use competition based arguments in claims for customers.
Do customers pay the criminal fines of English water companies?
Yes, in the long term. Because the only money input to a privatised water company is money from billing, customers pay for everything including criminal fines.
Do English water companies claim that customers do NOT pay the fines?
​Yes. For example, in the case of their 2021 £90 million fine, the Southern Water chairman claimed that: "our customers will not pay a penny towards our fine". When pushed for detail about who actually pays, explanations tend to focus on a intricate and confusing information related to the financial chicanery of the Water Act. Nevertheless, it can't be hidden, money originating from customer billing is used to pay the fine (even in the short term).