Introduction

The SPSO has made at least one decision in favour of the Water Industry demonstrating a lack of knowledge of the Law. It is Case: 201300100, Business Stream which is published at: http://www.spso.org.uk/sites/spso/files/decision_summaries/201300100.pdf and has been copied. Inserted comments are shown in red. The actual HTML code was copied on 24th February 2017.

In our view: firstly the decision is wrong because it fails to adhere to the law, namely Section 27 of the 2005 Water Act, and secondly, the SPSO erred in making a decision which required interpretation of the Law which is beyond his remit.

SPSO Decision and our Comments

SPSO decision report
Case: 201300100, Business Stream
Sector: water
Subject: charging method / calculation
Outcome: some upheld, recommendations

Summary

Mr C's business occupied premises in a large office building. His office did not have its own water supply, but had access to the building's communal water facilities.

The diagram included in the article Water Charges - The Law applies to Mr C's situation.

In January 2013, Business Stream contacted Mr C and told him that he was liable for drainage charges accrued over five years.

It appears that when going back five years, the end date is the date any writ is issued.

Mr C did not feel that his business should be liable for these charges, as his occupancy was agreed under a license with the property owner rather than a tenancy agreement. He said his office was not directly connected to a water supply and the terms of his license placed full responsibility for the building's fixtures and fittings on the licensor. Mr C also raised concerns about Business Stream's handling of his complaints.

Mr C had questioned whether his premises were 'eligible premises' as defined by the Water Services etc (Scotland) Act 2005. This defines premises that are eligible for water and drainage charges as those that are (or are to be) connected to the public water and sewerage systems.

The SPSO failed to determine whether Mr C's premises were "eligible premises" or not under Section 27 of the 2005 Water Act.

Although it is not for us to interpret this legislation, .../

The SPSO is prohibited from making any judgement relating to the Law.

/... we investigated whether Business Stream gave proper consideration to relevant factors when reaching their decision.

No definition of what the SPSO considers relevant factors is provided.

We found that they were obliged to set up their charges in accordance with the market code (which sets out the duties of participants in the water market, and provides technical specifications).

The Market Code is published by CMA Scotland Ltd which is limited company NOT in state ownership, and does not fully comply with the 2005 Water Act: more particularly Clause 5.15 and Section 27 refer. At this stage the SPSO should have stated that it was beyond his remit to make a decision.

Business Stream's treatment of Mr C's premises as an 'eligible premises' was in line with the code, which in turn was based on the legislation.

Both these statements are erroneous as the Market Code is in error, and NOT based on the legislation. Although PRIOR to the 2005 Act, it would have been.

Mr C felt that all water and drainage charges for his premises should be charged to the property owner (licensor) rather than him, given his status as a licensee. Again, it was not for us to determine what status Mr C's license gave him, or what difference this might make in terms of who should be liable for charges. However, we were satisfied that Business Stream made appropriate enquiries to establish who should be charged, and reached a
reasonable conclusion based on the information provided to them.

Without the information regarding their enquiries, it is not possible to comment except to say firstly: It is Scottish Water's Revenue Protection Department who undertake the classification of premises as eligible or not, whilst secondly Business Stream are simply the default organisation who collect charges. The SPSO therefore erred.

We were critical that Business Stream did not clearly explain to Mr C the reasoning behind their decision to charge his business for drainage, but we found that they responded to all of his correspondence in good time.

Business Stream would be unable to explain such reasoning as such reasoning is not logical, and therefore unjust.

Recommendations

We recommended that Business Stream:

  • take steps to improve the level of detail in their customer correspondence so that full explanations are given as to the reasoning behind their decisions; and
  • apologise to Mr C for their failure to properly explain the reasoning behind charging him for drainage.

Our Conclusion

Whilst these two recommendations are adequate in themselves, the decision itself errs seriously in that it is both wrong in fact [Mr C's premises are NOT eligible premises] and wrong in law as the SPSO de facto made a judgement interpreting the law, which is beyond his remit.