Committee publication · Correspondence · 2 September 2025
Correspondence from Dŵr Cymru (Welsh Water) regarding legal fees, dated 11 August 2025
From: Environment, Food and Rural Affairs Committee
Inquiry: Reforming the water sector
Summary
Welsh Water responds to the Environment, Food and Rural Affairs Committee's 16 July 2025 inquiry into legal expenditure, regulatory action, and legal team composition. The company reports £451,256 in external legal costs over five years defending regulatory matters with Natural Resources Wales, Ofwat, and the Drinking Water Inspectorate, plus £608,948 in insurance-related claims. It details five NRW prosecutions, 240 NRW warning letters, two Ofwat enforcement cases, and one DWI caution accepted without challenge.
Key findings
- £451,256 spent on external legal services defending regulatory action: five NRW prosecutions, two Ofwat enforcement cases, and environmental compliance advice; one prosecution dismissed at trial, one ongoing with not guilty plea, three concluded with guilty pleas.
- £608,948 incurred for legal costs on insurance claims relating to public liability and owner-controlled policies; currently facing a threatened group action claim over river pollution (Wye, Lugg, Usk) with potential for significantly increased legal costs.
- Natural Resources Wales has issued 240 warning letters and 9 formal cautions over five years; Welsh Water has not formally challenged these regulatory responses but engages in day-to-day liaison.
- Ofwat opened two substantial enforcement cases: one resolved following self-reporting of misreported leakage data; second ongoing investigation into wastewater management and statutory duties.
- Legal team comprises 14 employees including 6 qualified solicitors (General Counsel, 3 operational, 2 commercial/data protection) plus paralegals; no dedicated regulatory team; solicitors drawn as needed.
Tone
ProceduralTopics
Key actors
Dŵr Cymru (Welsh Water), Natural Resources Wales (NRW), Ofwat, Drinking Water Inspectorate (DWI), Environment, Food and Rural Affairs Committee, Alistair Carmichael MP, Peter Perry (Chief Executive)
Notable line
“We consider it appropriate that we should seek independent legal advice and support where we must respond to regulatory and criminal proceedings which carry potentially serious consequences.”
Key Quotes
“In the last five years, we have paid £451,256 to external legal service providers in response to regulatory matters concerning the three named regulators.”
“In respect of NRW, it has commenced five prosecutions against Welsh Water in the last five years. One of these was dismissed at trial when a court determined there was no case to answer; one is currently ongoing, and a not guilty plea has been entered; and in respect of a further three we have been sentenced having pleaded guilty at the earliest opportunity.”
“We are currently in receipt of a threatened group action claim for alleged private and public nuisance and breaches of the Human Rights Act 1998 in relation to pollution in the rivers Wye, Lugg and Usk …”
“We consider it appropriate that we should seek independent legal advice and support where we must respond to regulatory and criminal proceedings which carry potentially serious consequences.”
Source · parliament.uk record ↗