Lambeth Council approves plans to pay back tenants up to £26.55 million for overcharged water bills
By Grainne Cuffe, local democracy reporter
Lambeth Council has approved plans to pay back tenants up to £26.55 million for overcharged water bills.
About 23,000 current tenants and more than 12,000 former tenants could benefit.
Last October the Court of Appeal dismissed an appeal from Kingston Council after it was ruled to have overcharged tenants when supplying water.
The rejection followed a previous judgement that the council was liable for water overcharges dating back to April 2002.
The case considered whether the local authority had overcharged tenants for water by not passing on discounts it had arranged with Thames Water.
The court ruled that the council was a water reseller and not an agency, meaning it should have passed the discounts on to tenants.
The judges cited a similar case in 2016, when Southwark Council was challenged around the legality of the charges – it was found that it was in breach of the Water Resale Orders 2001 and 2006
In light of the rulings, and the unlikelihood of success in court, Lambeth, like other councils, has made the decision to pay back tenants.
A report, approved by Lambeth’s cabinet member for housing and homelessness, Councillor Jennifer Brathwaite, on May 5, states: “Lambeth Council, like many other local authorities, had agreements with Thames Water to collect water charges.
“The opinion of counsel is that further pursuing the test case at the supreme court would not result in success.
“A local authority that seeks to litigate the matter themselves would be unlikely to avoid this case’s consequences and the previous Jones v Southwark case.”
Lambeth’s agreement with Thames Water was terminated on March 31 last year- council tenants now get invoiced directly by Thames Water.
According to the report the council’s total liability for refunding current tenants is estimated at £17.95 million.
The total liability for former tenants is estimated in the range of £0 to £8.6 million, “with each end of this range assuming an equally unlikely event that either i) no former tenants come forward seeking a refund, or ii) all the councils former tenants dating back to 2001 come forward seeking a refund”.
The council has to date set aside £21.95 million in reserves to pay back the money.
The report recommends that the council “proceeds with adjusting all relevant current Tenant Rent Accounts with the appropriate credit adjustments covering the period July 1, 2001, to July 30, 2019”.
The council is planning to deal with former tenant accounts on a “case-to-case basis”.
The proposals will come into force on May 14, unless the decision is called in.
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