British water companies fight $2 billion lawsuits over sewage pollution

By Sam Tobin

LONDON (Reuters) - Six British water companies under-reported sewage discharges and overcharged millions of customers up to 1.5 billion pounds ($2 billion) as a result, lawyers bringing a landmark lawsuit told a London tribunal on Monday.

The utilities companies, including Britain's largest water provider Thames Water, are accused of misleading industry regulator Ofwat about the number of pollution incidents, which meant they were able to charge higher prices to customers.

But the six companies – which also include Anglian Water, Northumbrian Water, Severn Trent, United Utilities and Yorkshire Water – say the case should be thrown out.

The lawsuit, the first environmental competition law action to be brought in the United Kingdom, comes as the amount of sewage pumped into Britain's waterways has sparked public anger, prompting the government to pledge tougher oversight.

Environmental and water consultant Carolyn Roberts wants to bring the case, which alleges the six water companies "significantly and/or systemically under-reported" the number of pollution incidents to Ofwat.

Julian Gregory, a lawyer representing Roberts, told the Competition Appeal Tribunal that Thames Water alone may have failed to report more than 6,000 discharges.

Roberts' lawyers value the case against Thames Water, which is heavily indebted and trying to raise cash to stabilise its finances, at up to around 200 million pounds.

Gregory said the six cases should be certified to proceed towards a trial, an early step in the case. The water companies, however, say the case is precluded by English law regulating the water industry and should be dismissed.

Industry body Water UK said in a statement: "This highly speculative claim is entirely without merit. The regulator has confirmed that over 99% of sewage works comply with their legal requirements."

The hearing is due to conclude on Thursday and a decision on whether the case can proceed is expected at a later date.

(Reporting by Sam Tobin; Editing by Mark Potter)