
Supreme Court publishes key decision for those working in the UK’s gig economy.
Background
Housing associations and local authorities who have collected water charges from tenants, subsequently paid those water charges onto a water utility company, and then been paid a “commission” for doing so, will need to take into account the decision of Kingston-upon-Thames RBC v Derek Moss, decided in the High Court on 29 November 2019.
This is a High Court decision and may well be appealed further. This case effectively re-ran the arguments in a previous case (Jones v London Borough of Southwark), which was decided in 2016. The key question was whether the landlord was acting as an “agent” or “reseller” for the purposes of the Water Resale Order 2006. Southwark had an agreement with Thames Water, and in the 2016 case, Southwark was found to be a “reseller”, and that it had, therefore, overcharged tenants more than they were legally entitled to, which is limited by the Water Resale Order 2006. It is now reported that Southwark repaid 41,000 tenants a total of £28.6m.
In this new case, there was also an agreement with Thames Water, who said they had agreements at the time with some 70 councils and housing associations. The terms of the agreement in the Kingston case are helpfully set out in full at the end of the Law Report, so it is possible to compare whether a landlord’s water charges contract in question is in the same or very different terms. Kingston were also found to be a water “reseller” and that they had, therefore, potentially overcharged tenants. (The Water Resale Order 2006 permits a charge of £5.48p.a. for each tenant, but calculations would need to be carried out to see if their % commission exceeded that for each tenant.)
Other cases
It is worth remembering that in 2017 the High Court ruled that Rochdale Borough Council was not liable to compensate tenants for water bills because it was not a reseller but an agent. This was because of the wording of the agreement that they had in place. The risk level is, therefore, very much dependent on the individual contract with the water supply company.
Risk
For those landlords who may have had the same agreement with Thames Water as in the Kingston case, then the risk is higher.
Comment
Appeal?
How can we help?
We have been advising landlords on this issue since 2016. Should you need assistance as a landlord, please contact Helen Tucker.
Supreme Court publishes key decision for those working in the UK’s gig economy.
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