Widely reported shortages, hosepipe bans and the financial embarrassment at Thames Water have placed water management at the forefront of media attention in recent weeks.
Water companies in England (known as “Water Undertakers”) owe a statutory duty to citizens and businesses to develop and maintain an efficient and economical water supply system and to take all reasonably practicable steps to avoid shortages.
This duty is subject to significant qualifications and is primarily enforced through regulatory oversight rather than private legal action.
The increasing risk of shortages in recent years has led to enhanced regulatory scrutiny and investment requirements, but the legal duty remains one of reasonable, not absolute, assurance of supply.
Primary duties
Water Undertakers are regulated primarily under the Water Industry Act 1991 (“WIA 1991”). The key statutory duties relevant to water supply are:
- Section 37 WIA 1991: Imposes a general duty on water undertakers to “develop and maintain an efficient and economical system of water supply within their area and to ensure that all such arrangements are made as are necessary for securing that, so far as reasonably practicable, they are able to meet their obligations to supply water to premises in that area.”
- Section 52 WIA 1991: Requires water undertakers to provide a constant supply of wholesome water, subject to certain exceptions (e.g., drought, emergency, or unavoidable accident).
- Section 93A WIA 1991: Imposes duties regarding water resource management, including the preparation and maintenance of water resources management plans.
Regulatory oversight
OFWAT (the Water Services Regulation Authority) is responsible for economic regulation, including ensuring that Water Undertakers invest adequately to maintain supply and infrastructure.
The Environment Agency oversees environmental aspects, including abstraction licensing, drought management and oversight for reservoir operations (including safety and flood risk management).
Drinking Water Inspectorate ensures water quality.
Common law duties
Water Undertakers have contractual obligations to supply water to customers (both domestic and business) under the terms of their supply agreements, which are largely standardised and regulated.
There is limited scope for any actionable common law duty of care in negligence (or tort), as statutory duties generally take precedence. However, liability may arise if a Water Undertaker acts negligently outside the scope of its statutory powers.
Statutory duty to avoid water shortages
The statutory framework imposes a “qualified” duty on Water Undertakers to avoid water shortages. The duty is to ensure, “so far as reasonably practicable,” that water supply obligations are met. This qualification recognises that absolute guarantees are not possible, especially in the face of drought, force majeure, or other exceptional circumstances.
Water Undertakers must prepare and implement water resources management plans (WRMPs) and drought plans, which are subject to regulatory approval and public consultation.
Failure to comply with these duties can result in regulatory enforcement action, including fines, directions, or, in extreme cases, the appointment of a special administrator.
Limitations and defences
Reasonable Practicability: The statutory duty is not absolute. Water Undertakers are not liable for shortages caused by events outside their control (e.g., severe drought, contamination, or infrastructure failure despite reasonable precautions).
Force Majeure and Statutory Exemptions: The WIA 1991 and standard terms of supply typically include exemptions for interruptions due to emergencies, necessary maintenance, or compliance with legal requirements.
Regulatory Compliance: If a Water Undertaker can demonstrate compliance with statutory and regulatory requirements, this will generally be a strong defence to any claim.
The duty is not absolute and is subject to the “reasonably practicable” standard.
Remedies for affected citizens and businesses are often limited by statutory and contractual exclusions.
Regulatory enforcement is the primary mechanism for ensuring compliance, rather than private litigation.
Remedies for breach
Regulatory Action: Ofwat may impose penalties or require remedial action.
Civil Claims: Customers may have limited rights to compensation for loss or damage caused by supply interruptions, but these are often restricted by statute and contract.
Judicial Review: In some cases, affected parties may seek judicial review of a Water Undertaker’s or Regulator’s decisions, particularly if there is a failure to comply with statutory duties.
Recent developments and context
The Environment Agency and Ofwat have highlighted the increasing risk of water shortages due to climate change, population growth, and infrastructure challenges.
Water Undertakers are under increasing scrutiny to invest in infrastructure and reduce leakage, with new regulatory requirements and investment commitments (see Government Press Release, June 2025).
The National Audit Office and parliamentary committees have criticised both Water Undertakers and regulators for failing to ensure sufficient investment and planning to avoid shortages.
Conclusion
The remedies for affected individuals and businesses are few and far between and not easily attainable, save for exceptional circumstances. There is an apparent inequality here between the rights of the consumer and the accountability of the Water Undertaker.
The privatisation of the water industry has, arguably, seen an absence of sufficient investment in infrastructure. Industry commentators will say that this is a primary factor in undermining the capabilities for management, supply and retention of water.
Very simply, a lack of investment necessarily impacts upon the efficiencies of the infrastructure, systems and processes.
Consumer demand, “wastage” and inconsistent rainfall are secondary factors and ought not, alone, to be sufficient to dictate national emergencies and limitations on usage.
At Dyne Solicitors Limited we have a team of specialist lawyers with deep expertise and understanding of Environmental Disputes. We have acted in numerous cases against Water Undertakers and challenges against the Regulators.
If you have any questions, then please do not hesitate to contact one of our Team. The Litigation Department is led by Alex Sandland (01829 773100).