While the WaSUs successfully argued that the claims were barred under section 18(8) of the Water Industry Act 1991, the Tribunal handed them only a partial costs victory — reining in what it called a 'staggering' £12 million claim.
Introduction
The Competition Appeal Tribunal (CAT) ruling in Professor Carolyn Roberts v Severn Trent Water Ltd & Ors ([2025] CAT 29) provides an interesting example of a case where the costs do not necessarily follow the event.
The decision follows the Tribunal’s dismissal of six applications for Collective Proceedings Orders (CPOs) against major UK water utilities ([2025] CAT 17), which alleged abuse of dominance through misleading environmental performance reports to regulators, resulting in inflated consumer prices.
Key Findings on Costs
Issues-Based Allocation
In line with Merricks v Mastercard (Costs)[2024] CAT 57 and F&C v Barthelemy [2012] EWCA Civ 843., the Tribunal adopted an issues-based approach to costs (Rule 104 CAT Rules), departing from the default 'costs follow the event' principle. This was critical given the mixed outcomes on discrete issues. The PDs were allowed only one-third of their legal costs (excluding expert related costs) due to their failure on key issues (including competition law exclusion and expert methodology challenges).
Costs of expert evidence
The Tribunal comprehensively dismissed the PDs’ challenge to the PCR’s expert methodology. Consequently, the PDs were denied recovery of most expert costs despite incurring over £1.2 million. The Tribunal allowed only 20% of reasonably incurred joint expert costs, noting that separate expert instructions by three PDs (Thames Water, Yorkshire Water, Northumbrian Water) appeared excessive and lacked justification. Detailed assessment will determine reasonableness.
The PCR was awarded the costs of economic experts incurred after service of the PDs’ joint expert report (14 June 2024) – comprising 90% of costs of the economic expert Mr. Holt (Alix Partners), with that burden apportioned among PDs (Thames: 8%; United Utilities, Severn Trent, Anglian, Northumbrian: 18% each; Yorkshire: 10%); and 100% of the costs for Dr. Latham (Charles River Associates), to be paid by Thames Water. The costs were necessitated by the PDs’ unsuccessful methodological challenge.
Interim payments, proportionality and general criticism
The Tribunal emphasised that recoverable costs must reflect the 'lowest amount reasonably expected' for proficient representation (Kazakhstan Kagazy v Zhunus [2015] EWHC 404 applied). The Tribunal authorized interim payments on account but sharply criticized the PDs’ 'staggering' £12 million plus claim (expert costs excluded). Key concerns included:
Excessive Hourly Rates: Rates for five PDs far exceeded CPR Guideline Rates without 'clear and compelling justification' (Samsung v LG Display [2022] EWCA Civ 466 applied).
Inefficient Collaboration: Despite a joint response and counsel team, solicitors billed 1,880 hours for a 3-day hearing, with Yorkshire Water’s lawyers alone billing 400 hours.
The Tribunal ordered interim payments totalling £1.7 million.
Implications
The Tribunal will not suffer unreasonable duplication, is alive to debates about hourly rates and proportionality, and recognises the need to be fair to all parties. The decision also speaks to the Tribunal's (developing) rigour in its approach to costs management in collective actions. By disallowing the bulk of the PDs’ expert costs and censuring inefficient expenditure, the Tribunal reinforces the message that even successful parties must demonstrate a proportionate and (where appropriate) collaborative approach.
