R (River Action) v Ofwat

The Claimant alleged that Ofwat’s approach to allocating expenditure to water and sewerage companies for the purposes of enhancing their existing infrastructure was unlawfully irrational because, contrary to Ofwat’s stated policy, it would result in customers being charged twice for the same service levels.

The High Court rejected the challenge following a two-day hearing (held over three days). Mr Justice Swift held that Ofwat’s approach to modelling whether proposed infrastructure improvements went beyond maintaining existing service levels, for the purpose of preventing customers from being charged twice for the same thing, was clear and logical.

The Claimant also brought a challenge to the ‘clawback’ mechanism adopted by Ofwat in its price determinations, which was withdrawn during the hearing.

Ravi Mehta and Hugo Murphy acted for the successful regulator, instructed by Dentons.

The full judgment is available here.