Water companies win first stage of search providers’ overcharging claim

Water companies have won the first stage of search providers’ High Court claim of overcharging over a period of a decade.

Mr. Justice Richard Smith rejected the claimants’ contention that all the information needed to complete a CON29DW report was ‘environmental information’ (EI) within the meaning of the Environmental Information Regulations 2004 and should have been made available for free or for no more than a reasonable charge.

A majority of the information was not EI, he found.

Buyers’ solicitors routinely use search providers to source the CON29DW Drainage and Water Enquiry for residential property transactions and Commercial Drainage and Water Enquiry (CommercialDW).

There are 14 lead claimants, including all the well-known providers, while the defendants are the nine English water and sewerage utility companies, all of which sell the searches commercially, although Severn Trent and Wessex Water do so through separate companies, both of which are defendants too.

Welsh Water is no longer a defendant, having settled the claim.

On the basis that all of the responses required by the forms is EI, the search providers’ claim is in restitution, asserting that the charges levied were unlawful and/or paid under a mistake of law, and that the water companies have been unjustly enriched.

The damages would amount to the charges made, less what the court determined could have been lawfully charged had the utilities made the information available in compliance with the regulations.

The water companies deny liability, including on the basis that the information is not EI, that the information is not ‘held’ by them or that they are otherwise entitled under the regulations to refuse disclosure.

The stage 1 trial – which lasted just over a month in late 2023 – considered these latter issues rather than the defendants’ liability in unjust enrichment. The parties served 101 witness statements between them, and 36 witnesses gave oral evidence.

In a 178-page ruling, Richard Smith J held that while 11 of the answers were EI, 14 – ranging from water and sewer maps, assets and connections to low water pressure – were not.

He found that some of the information was publicly available and accessible but, again, some was not, while the question about internal flooding was personal data for data protection purposes.

The result was that the regulations did not govern orders for the reports or the amount that could be charged for them.

The judge said:

“No question of severance or apportionment of charges arises because customers were paying for the commercial service encompassing and implicating all the information contained in the report, whether or not some of it also happened to be EI.”

He accepted that, when the water companies satisfied CON29DW orders, “they were doing considerably more than meeting requests for (in this case, some) EI”; the reports were a commercial service, pursuant to contract – something the search companies did not dispute.

The judge continued:

“Indeed, although they question the value of some elements, they accept ‘the basic facts that the defendants provide the product with a relatively short turnaround time, that they undertake checking and quality control internally, that certain guarantees are offered, albeit the liability is limited in various material ways, and… that the defendants are in general willing to deal with follow-up queries and enquiries once someone has actually purchased a CON29DW’.”

Richard Smith J also held that the assurances provided as to the accuracy of the information provided in a CON29DW were far stronger than required by the regulations.

Indeed, someone ordering a CON29DW report “is seeking something very different” from that sought under the regulations, “such that attempted parallels between the two are not meaningful”.

As a result, he held that the level of charges levied for the searches was “a matter entirely” for the water companies to decide.

The judge concluded by suggesting that the case could now be settled:

“It is striking that more than 10 years have passed since the first CON29DW in this case was purchased, more than four since the issue of the first claim form.

“Despite this, the claimants’ position indicated at the start of a month-long trial was effectively that the defendants had got the ‘wrong end of the stick’ and that many of the issues were not relevant to their case despite the parties working for years towards their determination.

“Something has gone wrong here, and I trust that all parties will reflect on my findings and give meaningful consideration to whether this dispute is now capable of resolution other than through the court’s process.”

A spokesman for the claimants said:

“We are pleased that the court agreed with some important aspects of the claim on environmental information and believe this to be a matter of public importance.

“As we now consider our legal options ahead of a stage 2 trial, we note the court’s guidance to give meaningful consideration to whether this dispute is now capable of resolution and hope that the defendant water companies can do the same.”

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