Southwark Council lost a High Court case on water charges in 2016 (Photo: William Newman via Creative Commons)

Greenwich Council is to back a court challenge to a judgment which has resulted in many council tenants being eligible for refunds on their water bills, leader Denise Hyland has said.

Many London councils collect water charges from their tenants on behalf of Thames Water, meaning tenants do not have any direct contact with the utility.

One Southwark Council tenant took it to court, claiming the borough was making money on the deal. In 2016 the High Court ruled that Southwark had been buying and reselling water rather than acting as an agent of Thames Water. Southwark is now offering refunds.

Greenwich has a similar arrangement with Thames Water – but asked about the issue by Conservative leader Matt Hartley at Wednesday’s council meeting, Hyland said it would be backing a challenge to the ruling.

“It will affect all our council tenants – not just those that are here now, but who have been in the past,” she said. (Watch here.)

“Unfortunately, in our view, Southwark didn’t challenge that judgment. Greenwich is a member of a collective through the Local Government Association that involves 25 local authorities who intend to challenge that judgment.

“Essentially, there will be a test case, which I believe is to be held through Kingston, and all of us will be supporting Kingston as that goes through. It really is that old thing – are we seen as an agent or a reseller? We’ll just have to see what the courts say.

Hyland added that a QC had advised that “there was a good chance” the council would win the case, and that the Southwark judgment was “flawed”.

Addressing whether the council has set money aside to pay refunds, Hyland said: “This council is a very good council with a very good prudent financial record. So of course we put money by, but we haven’t earmarked any money for that particular pot.”