Yorkshire Water loses first round of bill battle

Yorkshire Water, the privatised water and sewerage group, has lost the first round of a bitter legal battle over increases in bills to one its largest industrial customers.

Illingworth Morris, one of Europe's biggest producers of wool fibres, revealed that it has been given the go-ahead by a High Court judge to pursue a legal case against Yorkshire Water, alleging it had been unfairly overcharged. In the meantime, the water company has been prevented from recovering some pounds 1.5m in unpaid bills until a full hearing, expected to take place later this year.

It also emerged last night that the Bradford-based Parkland Group, which makes wool fabrics for Marks and Spencer and other retailers, has also been threatened with imminent court action from Yorkshire Water in a separate, though similar, dispute.

Yorkshire Water became embroiled in furious rows with textile companies over increases in sewerage bills imposed from 1994. The firms involved, which became nick-named the "dirty thirty", claimed in some cases their waste water charges had gone up by three times. Textile manufacturers use huge quantities of water in dyeing and finishing processes. Most of the firms involved in the row have since paid their bills. A spokesperson for Yorkshire Water could not be contacted last night.

The Illingworth Morris case claims its subsidiaries, Jarmains and Woolcombers Processors, saw their bills rise by 47 per cent above inflation over a period of six years. Illingworth Morris had claimed in court that the increases were contrary to the Treaty of Rome, which protects against companies who misuse their dominant market power.

Alan Lewis, chairman of Illingworth Morris, explained: "We have worked in harmony with Yorkshire Water for many years. However, since the utility's privatisation our business relationship has become difficult and, from our point of view, commercially unviable. We still hope that, with the arrival of new management at Yorkshire Water, Common sense will prevail and further legal action will prove unnecessary."

Mr Lewis added that the pounds 1.5m was not the real issue in the case. He continued: "It's the principle of unfair and unjust charges which make us uncompetitive in Europe."

Separately, the Parkland Group confirmed that it had been threatened with court action by Yorkshire Water over one element of its waste water charges.