Water Charges - Emails with Scottish Water's Revenue Protection Department

Note: Italics are extracts from the email received

Thank you for replying.

In respect of non-domestic water and drainage services, Scottish Water is the wholesaler. The billing relationship exists between business customers and retailers who are known as Licensed Providers. Scottish Water therefore does not currently issue bills to customers direct however Scottish Water is responsible for deciding whether premises should be classed as “eligible premises”, in terms of s.27(1)(a)&(b)of the Water Services etc. (Scotland) Act 2005.

We are aware of the law, and in particular Section 27 of the 2005 Act which very simply and very clearly defines "Eligible Premises" although the phrase "Premises Liable for Water Charges" might have been better.

The recent case of Christopher Phillips v Scottish Water Business Stream Ltd, [2017] SC GLA 47 considered the definition of “eligible premises”.

I beg to differ but the case was actually the other way around..... Scottish Water Business Stream sued Mr Phillips.

The court decided in that case that the premises in question were not “eligible premises” which are defined as “premises which are, or are to be, “connected” to the public water supply or public sewerage system”. The court considered what is meant by “connected” and concluded that premises within a building can, in some circumstances, be classed as “connected” and therefore classed as “eligible premises” even if the premises themselves do not have a direct connection to the public water supply or public sewerage system. In the case referred to above the court decided that the premises in question were not “eligible premises” but it found that premises which do not have a direct connection can in some circumstances be eligible premises. The court found that the facts and circumstances of each case must be looked at individually to determine the matter. This means that a “one size fits all” approach is not appropriate to determining the issue. I attach a copy of the judgement which details the court’s reasoning.

This case has been referenced on the Unaccountable Scotland web site at:
http://unaccountablescotland.org.uk/index.php/water-charges/42-water-charges-sheriff-reid-s-judgement

The comment made is:

It is clear and concise and seems to be applicable to the vast majority of small business's who are tenants in business centres and the like.

This is a Sheriff Court judgement and therefore is not binding on any court. This means that if a similar case comes before the Sheriff Court again, or indeed comes before another court, then a different approach may be taken. This creates uncertainty for all parties; Scottish Water, Licensed Providers and customers alike. 

Uncertainty is what we are against. SW requires operate classification in a manner which meets with the law.

This is a complex matter which Scottish Water is carefully considering and we may also seek appropriate external legal advice. Scottish Water will review our stance once we have had the opportunity to fully consider the matter. It is not a complex matter. It is simple and straight forward.

Please see the diagram on this page:
http://unaccountablescotland.org.uk/index.php/water-charges/water-charges-the-law

It is strongly suggested that you commence classifying Landlord's premises which have facilities as Eligible, install Meters, and raise Charges as appropriate.

Noted that revenue will fall as a result. But also noted that the costs of clogging the courts up is substantial, with a large part of the costs being incurred being borne by the Courts.

The easy way to do this would be to compare your database with the Royal Mail's "PAF" [Postal Address File] which can be purchased, and which classifies every address to which post is deliverable. I have a great deal of experience with this source of information having written the software for the Northern Ireland warm homes scheme where it was used to validate claimants and landlords.See www.tdoc.com, and choose Bespoke Solutions.

Small Business's, especially start ups, REQUIRE certainty in the costs that they will face. Scottish Water's [viz your] current stance simply does not provide that certainty, and results in many of them becoming unsustainable. Often the people behind the start up get bankrupted, and in many cases credit card companies bear the loss.

Your response will be published shortly. 

xxxx [Manager] is currently on annual leave but passed your query onto me to respond to in his absence.

In respect of non-domestic water and drainage services, Scottish Water is the wholesaler. The billing relationship exists between business customers and retailers who are known as Licensed Providers. Scottish Water therefore does not currently issue bills to customers direct however Scottish Water is responsible for deciding whether premises should be classed as “eligible premises”, in terms of s.27(1)(a)&(b)of the Water Services etc. (Scotland) Act 2005.

The recent case of Christopher Phillips v Scottish Water Business Stream Ltd, [2017] SC GLA 47 considered the definition of “eligible premises”. The court decided in that case that the premises in question were not “eligible premises” which are defined as “premises which are, or are to be, “connected” to the public water supply or public sewerage system”. The court considered what is meant by “connected” and concluded that premises within a building can, in some circumstances, be classed as “connected” and therefore classed as “eligible premises” even if the premises themselves do not have a direct connection to the public water supply or public sewerage system. In the case referred to above the court decided that the premises in question were not “eligible premises” but it found that premises which do not have a direct connection can in some circumstances be eligible premises. The court found that the facts and circumstances of each case must be looked at individually to determine the matter. This means that a “one size fits all” approach is not appropriate to determining the issue. I attach a copy of the judgement which details the court’s reasoning.

This is a Sheriff Court judgement and therefore is not binding on any court. This means that if a similar case comes before the Sheriff Court again, or indeed comes before another court, then a different approach may be taken. This creates uncertainty for all parties; Scottish Water, Licensed Providers and customers alike. 

This is a complex matter which Scottish Water is carefully considering and we may also seek appropriate external legal advice. Scottish Water will review our stance once we have had the opportunity to fully consider the matter.

Kind regards,

[Head of Department]

There are some serious errors in this email - like the title of the cited court case. It was in fact the other way round, and is reported on this web site.

It is some time since we were in communication, since when our research into the conduct of Scottish Water and the raising of drainage charges for premises which are NOT eligible premises per Section 27 of the 2005 Act has proceeded.

What we are now doing is identifying people who are responsible for this which in our view is erroneous behaviour.

Therefore we would ask that you review and reply to the following question, which originates from a law abiding citizen of Scotland who would pay all the legitimate and valid demands for payment:

Please provide, from Scottish Water, or other source [the 2005 Act, or other legislation, or valid Legal Opinion -
with name of Counsel, or report of a court case [thus NOT from the SPSO]], the reason, valid in law, and thus
supportable in the Sheriff's court, that Premises which have neither a direct connection to a Scottish Water water
pipe, nor a direct connection to a Scottish Water Sewer whether it be Foul, Storm, or Combined should be treated
as an Eligible Premises.

There are three possible response scenarios:

• No response within seven days,
• A response providing the information requested,
• A response which does not answer the request.

This will enable us to produce a list of people responsible for inclusion in a possible Petition to Parliament.

The research carried out to date can be found at: http://unaccountablescotland.org.uk/index.php/water-charges

This gives a blog - i.e. a page showing the first paragraphs of all the published white papers, including the email exchange with Jon Rathjen.

His comment "Also as previously advised the option to negotiate with the landlord to change the charging arrangements is open to you if you are not content with direct charging" is correct in that a Landlord's kitchens and toilets should be classified as Eligible Premises, a meter installed, and charges raised. It is noted that this will probably substantially reduce SW's revenue compared to charging tenants individually - but that can be remedied by altering water charges via the Water Industry Commission for Scotland. Against that is the excessive cost of pursuing tenants who resist paying on a basis not sanctioned by the 2005 Act - which we estimate as £7,500 per case. You will note the mention of Note 9 in the Chataroo case which reads
"As a preface to his submissions the Dean of Faculty pointed out that this was but one of a not insignificant number of debt
recovery cases raised by the pursuers in this court."

If you wish to escalate this, please advise to whom that escalation has been made.