Green light for River Action legal challenge against Ofwat over water bills

River Action, which is represented by law firm Leigh Day, says that Ofwat has failed to properly regulate water companies, and warns this could result in customers having to foot the bill to cover past infrastructure failings.

After starting the judicial review process earlier this year, River Action has now been granted permission to proceed with its claim in the High Court. 

The claim relates to Ofwat’s Price Review 2024 (PR24), which was published in December 2024 and sets out prices for water companies over the next five years (2025 to 2029). 

River Action raises concerns over how funds allocated for investment in infrastructure are regulated. The group argues that Ofwat has failed to set out a mechanism to ensure that water companies use this funding to make actual improvements to infrastructure, rather than to help them achieve compliance with their existing permit conditions. 

River Action says that this could result in customers effectively having to pay twice for fixing past infrastructure issues – once through their previous water bills, and again through their upcoming bills. 

The campaign group points to a request from United Utilities in summer 2024 for enhanced funding to use for improvements to water treatment works and pumping stations in Windermere.  

This funding was granted by Ofwat as part of the PR24, a decision which River Action says did not address all relevant information – such as research revealing that 6,000 hours of raw sewage had been pumped into Lake Windermere over 2024.   

River Action argues that the approach used by Ofwat to help make decisions and assess water company performance is flawed, because Ofwat chose to use modelling to check compliance with permit conditions and ignored actual information which was sent to them showing breaches. River Action also questions whether the regulator would have the ability to claw back funding if it has been misused.  

In March 2025, River Action sent a pre-action protocol letter to Ofwat laying out its claim, before applying for a judicial review in April. 

Now, the claim has been given permission to proceed on the following grounds: 

• Ofwat’s approach to implementing its ‘not paying twice’ policy was unreasonable because the regulator relied on “hydraulic simulation modelling” (a method for forecasting sewage infrastructure capacity), which River Action argues does not reflect the reality shown in evidence provided to Ofwat by Windrush Against Sewage Pollution.
• Ofwat does not have a workable ‘clawback’ provision for if funds are misused by water companies.
• Ofwat made legally insufficient enquiries into whether the modelling approach it uses to assess compliance is adequate. 

River Action head of legal, Emma Dearnaley, said: 

“We are delighted the High Court has said we can take our case to court. This is about the British public not paying twice for the consequences of water companies failing to invest in infrastructure. That is quite obviously fair and right, yet Ofwat’s approach gives rise to serious concerns that its promise has not been kept.   

It also raises important and timely questions about whether Ofwat is fit for purpose, something the Independent Water Commission is scrutinising too.  We must have robust regulators who are up to the task of holding water companies to account.” 

Leigh Day partner Ricardo Gama, who represents River Action, said: 

“It’s important that when public bodies tell the public they will do something, they actually do it. Ofwat said again and again that customers would not have to pay to sort out issues which should have been fixed decades ago and which are leading to permit breaches by water companies. But the documents which Ofwat have sent us appear to show that they haven’t actually checked that the money won’t be used in this way.”