Northumbrian Water Limited, R (on the application of) v Water Services Regulation Authority

Northumbrian Water Limited, R (on the application of) v Water Services Regulation Authority

The CE exception in the PR19 Reporting Guidance confers a discretion on Ofwat to relieve a water company from price reductions for underperformance caused by a civil emergency, not an obligation. Ofwat must exercise this discretion in accordance with its statutory duties under s.2 of the Water Industry Act 1991, balancing the interests of consumers and companies. Ofwat did not err in law, act irrationally, or for an improper purpose, nor was it required to publish a policy on the exercise of this discretion. The final determination was lawful and rational.

Parties
Claimant: Northumbrian Water Limited; Defendant: Water Services Regulation Authority (Ofwat)
Jurisdiction
England and Wales
Judgment Date
11 October 2024
Procedural Posture
Judicial Review / Final Judgment After Expedited Rolled Up Hearing
Outcome
Claim dismissed
Legal Topics
Statutory Interpretation, Regulatory Discretion, Judicial Review, Price Control Settlements, Outcome Delivery Incentives (odis), Civil Emergency Exceptions
Regulatory Law Administrative Law Utilities Law Statutory Interpretation Regulatory Discretion Judicial Review Price Control Settlements Outcome Delivery Incentives (odis) +1 more

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Parties

Northumbrian Water Limited

Claimant

Water Services Regulation Authority (Ofwat)

Defendant

Procedural Posture

Judicial Review / Final Judgment After Expedited Rolled Up Hearing

Legal Issues

  1. 1 Whether Ofwat has a discretion under the civil emergency exception (CE exception) in the PR19 Reporting Guidance to relieve a water company from price reductions for underperformance caused by a civil emergency
  2. 2 Whether Ofwat misdirected itself in law in exercising or not exercising such discretion
  3. 3 Whether Ofwat was required to have or publish a policy on the exercise of any such discretion (duty of prescription)

Ratio Decidendi

The CE exception in the PR19 Reporting Guidance confers a discretion on Ofwat to relieve a water company from price reductions for underperformance caused by a civil emergency, not an obligation. Ofwat must exercise this discretion in accordance with its statutory duties under s.2 of the Water Industry Act 1991, balancing the interests of consumers and companies. Ofwat did not err in law, act irrationally, or for an improper purpose, nor was it required to publish a policy on the exercise of this discretion. The final determination was lawful and rational.

Court Disposition

Claim dismissed