The need for unlocking the potential of the reformed SAR: a commentary on the Thames Water (interim) restructuring plan

The potential failure of water companies, which are normally regional monopolies, involves extraordinary public interest. Under the Water Industry Act 1991 (WIA), the English regulator has general duties to protect the interests of consumers, ensure the continuity of vital public services, and promote the long-term resilience of water supply and wastewater systems. A critical enforcement tool is the Special Administration regime (SAR), a dedicated statutory framework under the WIA that empowers the English regulator to deal with a failing service provider. Despite the substantial reforms in 2024 aimed at strengthening it, the regime has never been meaningfully considered as an option, reflecting persistent regulatory reluctance. This reluctance is illustrated by the recent restructuring of Thames Water, the biggest water provider in this country, which, amid acute financial risks, adopted a market-led solution partially implemented through a court-sanctioned restructuring plan in 2025. The sanction judgment drew widespread criticism for permitting high-cost bridge financing, yet left the company in prolonged uncertainty. The purpose of this article is to provide a legal analysis of the court’s limited role in safeguarding the public interest outside a SAR and critically consider whether the option of placing Thames Water into a SAR should have been more seriously considered. It further evaluates the applicability and effectiveness of the SAR, particularly in light of recent legislative reforms, arguing misconceptions of its nature and purpose have simply rendered it, to some extent, redundant.