Could the floodgates be opened? - Supreme Court to review case against "Water Giants"

Professor Roberts alleges that the Water Companies (which each operate a statutory monopoly on water and sewerage services in their respective areas) understated the number of pollution incidents in reports to the industry regulator – the Water Services Regulation Authority ("Ofwat"). Professor Roberts argues that this under-reporting is an abuse of dominance under competition law, which led Ofwat to approve higher prices chargeable to consumers.  Professor Roberts alleges that if Ofwat had been aware of the true number of pollution incidents, it would not have allowed the Water Companies to charge these higher prices which caused consumers to suffer a loss.

The claim has been brought by Professor Roberts as an "opt-out" collective proceedings action under section 47B of the Competition Act 1998, on behalf of millions of customers of the Water Companies. On 7 March 2025, the CAT refused to certify the class actions, citing an exclusion under section 18(8) of the Water Industry Act 1991 (WIA).

Essentially, s.18(8) WIA excludes private law remedies for breaches of certain WIA provisions. Professor Roberts's claim was brought on the basis of a breach of license condition, which the CAT found brought it into the remit of s.18(8) WIA. The same section received authoritative interpretation by the Supreme Court in United Utilities Water Ltd v Manchester Ship Canal Co Ltd (No 2) [2024] UKSC 22.

The CAT concluded that Professor Roberts’ claims for abuse of dominance were inextricably linked to the alleged breach of licence conditions – specifically the duty to accurately report pollution incidents – so remedies outside the regulatory framework were unavailable. Importantly, the CAT noted that absent this exclusion, the claims would have met the relevant certification requirements.

Professor Roberts appealed, arguing that the misleading statements to Ofwat were freestanding incidents, regardless of whether they were also breaches of Ofwat's reporting conditions – and therefore need not be constrained to the remedies available under the statutory regime.

In March 2026, the Court of Appeal dismissed the appeal (in a split decision, with Zacaroli LJ dissenting, seeing Professor Roberts' claim as a freestanding competition law claim). Whilst, notably, majoring on different reasoning to the CAT, the Court still held that s.18(8) was engaged.

The Court of Appeal's reasoning referenced 1) the content of the claim (in that, the claim would not make sense without reference to the regime which details the Water Companies' reporting obligations); 2) that the breach of duty was not independent/freestanding of the statutory regime; and 3) the context to the claims (that Ofwat's price control mechanism is intertwined with the statutory regime, and cannot be contextually removed from that).

The Supreme Court's decision to hear the appeal signals recognition of its public importance, particularly regarding the intersection between competition claims and regulatory regimes featuring statutory monopolies. The case – being positioned in some commentary as an ‘environmental’ action – may ultimately broaden the types of claims considered for collective proceedings and further test the boundaries distinguishing competition law from regulatory enforcement.

The Supreme Court will not adjudicate on the substance of the case (i.e. whether the water companies did breach competition law); rather, the specific question it will consider is whether a cause of action under section 18(1) of the Competition Act 1998 (which prohibits the abuse of a dominant position) can be excluded by section 18(8) of the Water Industry Act 1991. At its core, it is a question of which regime should prevail.

Clients operating in regulated sectors – particularly those involving statutory and/or natural monopolies – should closely monitor the outcome of this Supreme Court appeal. It will likely clarify the extent to which competition law claims are available when conduct is intertwined with breaches of regulatory obligations or licence conditions. The case also underscores increased activity and innovation in collective environmental claims, which may have broader implications for compliance, risk management, and litigation exposure.

The Supreme Court’s ruling will likely be pivotal in shaping the boundaries of collective proceedings and statutory exclusions in regulated markets, determining not only permissible litigation routes but also the scope for consumer redress and environmental accountability. The case could have wider implications for businesses regulated by statutory frameworks – as the resulting impact may be that breaches are not only investigated by the relevant regulator (in some instances leading to financial and criminal sanctions); but could also be pursued as breaches under other regimes (such as competition law).

Being only the third time a collective proceedings certification decision has reached the Supreme Court, the result will be a significant marker for regulated industries, class action claimants, and competition law development. Could the case against the Water Companies open the floodgates to a number of similar claims? Time will tell following the decision of the Supreme Court, which is due to hear the appeal in February 2027.