UK Construction and Law

A homeowner must repay a 225,000 pounds flood settlement after failing to tell Thames Water that the house she called unsaleable had been sold

By Staff Writer  |  26 October 2026

The High Court has rescinded a settlement deed on summary judgment. The homeowner's claim had rested on the house being unsaleable, and she completed its sale for 780,000 pounds while negotiations were still running, without telling the water company.

Deputy Master Marzec gave summary judgment for Thames Water Utilities Ltd against Mrs Karen Imber on 23 October 2026 in Thames Water Utilities Ltd v Karen Imber [2026] EWHC 2720 (KB). The Deputy Master rescinded the settlement agreement between them and ordered the settlement sum to be repaid, with any damages to be assessed.

Mrs Imber's home in Woodford Green, Essex, was flooded by sewage water in 2006 and 2007. Her first claim settled in 2013 for 500,000 pounds. The house flooded again in 2014 and she brought a further claim. Thames Water denied liability.

A house described as unsaleable

In 2022 her then solicitors sent Thames Water an expert report valuing the house at 817,000 pounds on the footing that it had never flooded, and saying there was likely to be no willing buyer. Her mediation statement of 11 July 2023 said she was trapped in the house because it could not be sold, and claimed its whole value as diminution in market value. Her other heads of loss came to about 144,000 pounds.

The mediation on 20 July 2023 did not settle. On 1 August her solicitor offered to settle at 250,000 pounds plus costs, which was refused. On 19 August she accepted 180,000 pounds plus 45,000 pounds in costs, and a deed of 6 September 2023 recorded a full and final settlement of 225,000 pounds, paid on 13 September.

Thames Water did not know that she had accepted an offer of 780,000 pounds for the house before the mediation, exchanged contracts on 2 August 2023 and completed the sale the next day.

A duty to correct

Her case, taken at its highest for the application, was that she told the mediator about the accepted offer but said she did not expect the sale to complete, and that she told her solicitor about the sale on 6 September 2023. The solicitor disputes her account, and the court made no finding of misconduct against him.

The Deputy Master held that the statement that the house was unsaleable, even if an opinion, implied that it had not been sold and that there was no prospect of a sale. Those implied representations became false on 3 August 2023 and she was under a duty to correct them before the deal was done. Thames Water had been influenced by them, whether or not it accepted that the house could not be sold. Telling her own solicitor after the deed was signed did not help her.

In my judgment, ordinary decent people would plainly regard it as dishonest to continue to pursue and to settle a legal claim based on the contention that a property was unsaleable after the property had in fact been sold, without informing the opposing party of that fact.

Deputy Master Marzec, King's Bench Division

The Deputy Master found that Mrs Imber had no realistic prospect of resisting a finding of dishonesty at trial, while noting the caution a court must exercise before deciding dishonesty summarily.

A statement made to support a head of loss in a mediation can carry continuing representations of fact, and a party who learns that they have become false must correct them before settling.

For anyone negotiating a claim for diminution in value, a change in the facts behind that head of loss after the mediation is something the other side must be told before the deed is signed.