Surface water drainage refund claim.

devondiver

Hi all

For the information of any interested fellow members I am currently attempting to reclaim surface water drainage charges paid to my water company (South West Water) since April 2001. I realise that many people have attempted to do the same, mostly unsuccessfully, and that there are many threads on this forum relating to this issue – most of which I have read.

The key facts of my own case are:
a) In 2002, in response to a SWW leaflet about soakaways and the new two-tier surface water drainage (SWD) charging system I called the appropriate helpline to ask “How would I know whether or not I am connected for surface water drainage?” The answer I received was along the lines –“If you are not connected, which is very unlikely, then you must have a soakaway and if you had a soakaway you would definitely know about it”. I accepted this answer in good faith and continued to pay the full charge requested.
b) I live on a rural estate of about 90 dwellings built mostly between 1979 and 1983 and a close neighbour suggested recently that I check my SWD situation. On checking the local planning office site plans and correspondence of the time it is evident that South West Water (then) Authority was fully consulted and aware that all properties on the estate benefit from, indeed were required to have, ‘private’ surface water drainage either to soakaways or to ‘private’ drainage ditches (as is the case with my own property).
c) However, SWW now claim to have no records from the pre-privatisation water authority, that the onus is solely on the customer to claim the lower tariff and that they have acted fully in accordance with the published Ofwat guidance. (A position with which the principle advisors on this forum seem invariably to agree.)
d) SWW’s own published Customer Promise 2012 states under section 15. Money paid in error: “If it is discovered that you have wrongly paid money for a service which we have not provided, we will refund all of the money paid for a period of up to 10 years before the mistake was discovered. Interest will also be included if the period in question was over 12 months.”
e) The current Ofwat website guidance states: “There will be occasions when a company did know, or might reasonably be expected to have known, that a property or properties were not connected to its sewerage system for surface water drainage. Under such circumstances we would expect the company to apply a rebate with effect from the date that it knew it was not providing the service.”
f) I have been told that other residents of my estate have received SWD refunds backdated a number of years and I know of one resident who had a case against him for non-payment of SWW bills, his reaction to refusal by SWW to refund SWD charges, withdrawn when it came to court. He has not paid a water bill since 2009 and is currently pursuing SWW for a 5-figure sum for time and expenses incurred in defending the case.
g) When, in early 2012, I did apply for the reduced SWD tariff it was granted by SWW with no questions asked, no layout plan and no engineer’s site visit, and this was also the experience of other estate applicants.

My case is then, using the Ofwat wording, that SWW either did know, or might reasonably be expected to have known, that my property along with most or all other properties on this estate were not connected for SWD to their main sewer and that the advice given to me, and probably others, in 2002 was completely wrong.

Defence of the water companies’ position frequently quoted on this forum (by far more eloquent and experienced members than me) seems always to follow the line that “water companies’ revenues are set by Ofwat and they have nothing to benefit from ‘diddling’ their customers”. Well perhaps their revenues are capped but what about their profits? And if so why does SWW boast about a 9.8% profits rise in 2012 (to £141million) on top of a rise of 8.7% the previous year – and in a time of supposed austerity (we’re all in it together, Dave), and in the area where water charges are already the highest in the country!?

The other defence (of the water companies) - the argument that ‘present’ customers cannot be expected to share the cost of recompense for past injustices seems to me indefensible and it is surprising that complainers are so easily fobbed off by this. Surely a fundamental cornerstone of civilised society is the principle that we assist victims of injustice (and exact retribution from the perpetrators). The PPI scandal is a case in hand, as is the unfair bank charges debacle. I suspect the time is approaching when the water companies will get their comeuppance – just like the financial institutions, the popular press, the politicians, etc.

Sorry to have dragged on and thanks to those still with me. If anyone has constructive and encouraging comments or experiences perhaps they would share them here. If I remember rightly, previous suggestions that MSE champion the cause of correcting water companies’ abuses fell on deaf ears. Perhaps it is time that call was renewed.

Cheers all

Paul

Cardew

Excellent post.

The whole situation with Surface Water Drainage(SWD) is a disgrace.

The Water Privatisation Act decreed that the 'default' position would be that SWD would be charged and customers would have to claim exemption from the charge. Initially the companies were given 10 years to sort out a better system, but then that 10 year provision was dropped in an amendment to the Act.

Personally I didn't consider there was any need to make SWD a separate charge, especially as(often) the same charge is raised if you you live on the 10th storey of a 20 storey tower block, or a house with many acres. i.e. the charge has no relevance to the amount of water entering a sewer from your property.

As mentioned above, it is absolutely ludicrous that all occupants of a, say, 20 storey block of flats all pay the full SWD charge.

However given that our political masters decreed that SWD would be charged, it was obviously impractical for the water companies to inspect some 20 million dwellings to find out the position of every property.

Your case obviously depends on the 'or might reasonably be expected to have known,' issue.

IIRC only one person has claimed on MSE to have had the rebate backdated; most companies use the Ofwat guidance as a defence and refuse to budge. Albeit I suspect that if you went to court they would 'cave in'.

There have even been cases quoted where an occupant claimed relief from SWD and when a new occupant took over the property, the charges reverted to charging for SWD.

I am not sure I agree with you about Revenue and profits. The biggest criticism I have of the water companies is that they are in a win/win position and(as you concede) their revenue is capped. Their increased profits are funded by meeting targets set by Ofwat - e.g fixing leaks - and efficiency measures; and of course the companies have many other 'irons in the fire' apart from their core business of supplying water to customers. This is an example for Severn Trent:

http://www.telegraph.co.uk/finance/newsbysector/utilities/8915075/Severn-Trent-profits-hit-by-exposure-to-Italy.html



It is also IMO a valid argument that any backdated rebates will inevitably be funded by present customers in increased charges. How you view that situation will largely depend on ???

I suspect you will win your case on the 'reasonably expected to know' clause. However there is surely a case for backdating refunds for everyone who has suffered an 'injustice' and been wrongly charged for SWD.

The problem is that, given the funding of water companies, they have absolutely no incentive to put right injustices.

I wish you luck, keep us informed.

devondiver

Thanks Cardew for the words of encouragement.

Re. Revenue and profits – a quick scan of SWW’s annual report could find no mention of interests other than water and sewerage. Okay, Ofwat sets the ceiling but they have leeway to maximize profits within this any way they can (like the banks).


This is an issue which was perfectly foreseeable and for which the water companies should have made provision (like the banks, eventually). Messes like this don’t just go away. Perhaps the time is right for customers who have had the mickey extracted to stand up and be counted. That will provide some incentive for the companies and regulators to listen and take action.
Will keep you posted.

Cardew

devondiver wrote: »

Thanks Cardew for the words of encouragement.

Re. Revenue and profits – a quick scan of SWW’s annual report could find no mention of interests other than water and sewerage. Okay, Ofwat sets the ceiling but they have leeway to maximize profits within this any way they can (like the banks).


This is an issue which was perfectly foreseeable and for which the water companies should have made provision (like the banks, eventually). Messes like this don’t just go away. Perhaps the time is right for customers who have had the mickey extracted to stand up and be counted. That will provide some incentive for the companies and regulators to listen and take action.
Will keep you posted.

As I said in my other post, the problem was forseen when water was privatised and they had 10 years to sort it out. However it all became too difficult and the Act was amended.

The problem is that with the current funding arrangements the Water Companies have absolutely no incentive to sort it out, and have Ofwat's blessing to carry on in the same manner.

Even if the law was changed and they had to refund £millions, they would be allowed, as Ofwat indicate, to increase other charges to compensate.

They are in a win/win situation.

P.S.
Have you read Pennon Group's last half-year report.

http://www.pennon-group.co.uk/pennon/uploads/latestnews/Pennon_HalfYearResults2012_PressRelease.pdf

They explain how SWW profits have increased despite a decreased demand for water.

devondiver

So, as with the banks, politicians, etc., it’s not the water companies that are at fault but the regulators who allow them to do what businesses exist to do i.e. maximise profits. Our target for complaints therefore should be Ofwat, and perhaps CCW, who have allowed an unsatisfactory situation to be perpetuated for far too long.

It is interesting and, I believe, very significant that Ofwat have recently changed the wording of their guidance on this – as you highlighted in an earlier thread (4170009 - 10.09.2012 - not allowed to link apparently).

Their earlier wording was illogical and did not allow for situations such as mine and the above thread, where a whole estate may be on ‘private’ SWD and yet the water company, although well aware of this, could continue for years to hide behind the Ofwat guidance.

It’s also interesting that SWW have been instructed this year to return £50 of their vast accumulated profits to each of their long-suffering customers. Do you think they will be chasing down past customers who have left the area – or do you think the ‘new’ residents will get it? I wonder.

Cardew

devondiver wrote: »

It’s also interesting that SWW have been instructed this year to return £50 of their vast accumulated profits to each of their long-suffering customers. Do you think they will be chasing down past customers who have left the area – or do you think the ‘new’ residents will get it? I wonder.

I believe you are incorrect and SWW collect that £50 from HM Government.

http://www.guardian.co.uk/money/2011/nov/29/south-west-water-customers-rebate

The surprise announcement in the chancellor's autumn statement, which looks designed to appease the Liberal Democrat MPs who dominate that area, will see a £50 a customer subsidy paid directly from the Treasury to South West Water, the privatised company which supplies the area.

Not surprisingly SWW welcomed the 'donation' of £50 a customer in that half-year report I posted earlier.

IMO an even greater criticism of the Water Privatisation Act was to land the South West with such huge charges. This as a result of a large area, low population and the need to keep beaches nice and clean for us holiday makers!

devondiver

A cynic might suspect that it is far from being that simple. (Surely you watch "The Thick Of It".) The whole exercise is dressed up to bathe the various parties in the best possible light.

devondiver

For update see my new thread - Surface Water Drainage charge backdate - South West Water capitulates.

poppasmurf_bewdley

When I moved into my cottage at the end of 2010, I had a water meter already fitted to the system.

I made enquiries locally and it transpired there was no mains drainage in the area, but I was being charged for surface water drainage.

I contacted Severn Trent, who replied that they would send an inspector to check the situation. He duly arrived and wanted to know the location of the soak away, which I showed him. He then let the cat out of the bag by saying "I knew you didn't have mains drainage - we don't have any drains in this area!"

The previous owner (who is now in a care home) had been paying for SWD since the cottage was converted from a stable in 1991.

The charges were removed from my bill, and the charge I had paid was refunded.

My total water bill for a year is now less than £100, compared to £350 at my previous property.

devondiver

This seems to be their normal MO. Make sure you get all of your money back with interest.

How long are these companies (and OFWAT and CCW who sheild them) going to be allowed to get away with this blatant scamming? (Sorry, Cardew but there's no other word for it.)

Cardew

devondiver wrote: »

This seems to be their normal MO. Make sure you get all of your money back with interest.

How long are these companies (and OFWAT and CCW who sheild them) going to be allowed to get away with this blatant scamming? (Sorry, Cardew but there's no other word for it.)

Firstly am no defender of water companies, and the Water Act that created this system.

The financing of water companies means that they are in a win/win position. They don't lose when they refund charges, or correctly lower charges.

Conversely they don't gain when they make charges which can be reclaimed and thus make extra -revenue from SWD.

Note: I deliberately did not say 'overcharged'.

The culprit here is the Water Act that laid down that the 'default' position is that properties be charged for Surface Water Drainage(SWD) and occupants claim relief from the charge. This despite the fact that in many areas for the past 30 years it would be rare for properties to to get planning permission unless the property used a soakaway.

Given that it was decreed that SWD would be a factor in water charges(stupidly IMO) it was obviously completely impractical for the water companies to carry out a physical inspection of some 20 million properties in UK to determine if surface water entered the drainage system. I suspect the majority of occupants have no idea if they have soakaways or not.

Also it is not just rain from the roof that determines if SWD should be charged. If water flows off your land onto the road, and hence eventually the sewers then you are liable.

Initially the Water Act gave the companies 10 years to sort out the SWD, but it all became too difficult and the Act was amended to allow the current situation to continue. What makes it worse is SWD charges vary tremendously between companies.

The obvious answer would be to scrap SWD and regain the lost revenue from water charges.

So the situation is a complete mess - agreed. However it isn't a scam by the water companies and they have no incentive to rectify the problem.