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Which Water Companies Have Been Prosecuted For Unsafe Water?

Over at least the past year, water consultants have been kept increasingly busy by a British water industry that could reasonably be stated to be at least in a state of chaos, and in some regions, this has escalated into outright existential crises.

This has naturally made the job of people advising businesses on their water strategy both more critical and much more difficult, primarily because in 2024 the industry is on the precipice of several unprecedented events in the industry.

There is a wide-encompassing investigation by the Environment Agency into unauthorised discharging of raw sewage into waterways, including into areas of outstanding natural beauty such as Lake Windermere, fines on an unprecedented scale, proposals to increase bills to an unprecedented scale, and the potential for Britain’s biggest water company to collapse.

A lot is happening very quickly, and with water quality being a political issue as well as a social, economic and health issue, there is an expectation that the beginning of wide-encompassing action will begin soon after 4th July 2024, irrespective of the results.

This would be in stark contrast to the actions of the Drinking Water Inspectorate before 2024, where just three companies have been prosecuted for providing unsafe drinking water.

This is, as a report by The Guardian notes, in stark contrast to the 362 known instances where water was deemed unfit for human consumption, a figure that does not count recent boil water notices by South West Water and outbreaks of water-borne diseases such as cryptosporidium in Brixham and Beckenham.

Why is the number of prosecutions so low, what can businesses and individuals do about it, and could this change in the future?

A Company’s Guilty Mind

Two points need to be made almost immediately to explain the low number of prosecutions, both relating to the burden of proof needed to make a prosecution for the relevant criminal offences.

The first is that, as the lengthy investigation by the EA demonstrates, investigations and court proceedings can take a very long time, and the more complex and far-reaching the allegations, the longer this process can take. It will take years to truly calculate the damage.

The second is the burden of proof not only that a crime has been committed but that the water company did not take all the steps it reasonably could to understand and manage the situation.

As of June 2024, this has led to three total prosecutions, as well as a further two cautions against Thames Water and Southern Water, although the former has been involved in a further outbreak so this could change.

In 2022 Southern Water was convicted for contaminating water with sodium chlorate, caused by improper handling of sodium hypochlorite (aka bleach). It led to a £16,000 fine and £170 being paid to victims.

The same year, the infamous “slice of lemon” incident took place involving South West Water, where brown, strange-smelling water was dismissed by the company but ultimately led to a fine of £233,333 plus the same victim surcharge of £170.

Finally, the DWI prosecuted Wessex Water in 2023 for strange tasting and undrinkable water, leading to a fine of £280,000 plus a £190 victim surcharge.

This has, rather understandably, led to strong criticisms about the relatively light sentences given the potential danger and widespread consequences, but to this end, Ofwat and the water industry have been trapped in a Catch-22 situation.

Still Too Big To Jail?

The water industry in England and Wales is in a position only matched by the country of Chile in the sense that it is fully privatised rather than having a mixed-ownership or public-private agreement.

This level of privatisation has led to a moral hazard situation where there is a reluctance to penalise water companies, as this could be seen as affecting their ability to continue to provide even an adequate service and may lead to increased bills and water companies passing the fines onto their consumers.

There is an implied, and in some cases, outright explicit threat that fines and punitive measures proportionate to the crimes and infractions would lead to a collapse of a water company that is, by the nature of it being a vital industry, too big to fail.

The alternative, nationalisation in whole or in part of some or all water companies in England and Wales, matching the industry in Scotland and Northern Ireland, is seen as ideologically undesirable, and situations such as Bulb Energy’s collapse in 2022 and Northern Rail in 2020 tried to avoid the word ‘nationalisation’.

However, public ownership is politically popular, and the shape of the water industry could change dramatically as the shape of British politics does, which could potentially lead to further prosecutions and more escalated actions being taken.