Applying the July 2014 Environmental Offences Definitive Guideline - Warning to Commercial Organisations

R v Thames Water Utilities Ltd [2015]: Applying the July 2014 Environmental Offences Definitive Guideline - Warning to Commercial Organisations

The tough July 2014 environmental sentencing guidelines and the even tougher approach adopted by the courts when applying the guidelines in the case of R v Thames Water Utilities Ltd [2015] EWCA Crim 960 sends a powerful message both to organisations (in particular, very large commercial organisations) and to individuals that environmental regulatory compliance will not be dealt with leniently by the courts. Environmental breaches may now result in extremely significant penalties, far exceeding fines previously imposed.

R v Thames Water is the first case where the court applied the July 2014 environmental sentencing guidelines when deciding upon the appropriate fine to impose upon a company for an environmental permitting offence. It offers an insight into the new tougher judicial approach against organisations who are not taking their legal obligations to protect the environment seriously

Environmental

R v Thames Water Utilities Ltd [2015] EWC Crim 960SignificanceLarge, commercial organisations with high turnovers should be particularly vigilant against committing environmental offences as a result of negligence or otherwise. Indeed, Mr Justice Mitting in his Court of Appeal judgment placed particular emphasis on the position with "very large commercial organisations run for profit" and the need to ensure in these cases that penalties imposed are "proportionate and just" and "bring home to the management and shareholders the need to protect the environment";

Companies with one or more previous convictions relating to negligent environmental offences should also be particularly aware of the risks of re-offending. Mr Justice Mitting said that a record of "repeated operational failures" as a result of negligence or worse is "suggestive of a lack of appropriate management attention to environmental obligations "and therefore such previous convictions will be "seriously aggravating features" where it will be appropriate for there to be a "substantial increase"in the level of fines imposed. He said that for repeat offenders, "the fine should be far higher and should rise to the level necessary to ensure that the directors and shareholders of the organisation take effective measures properly to reform themselves";

All organisations would be advised to assess whether it is worth bearing the cost now of implementing or installing new equipment or taking other measures to help prevent environmental breaches rather than potentially facing substantial fines in the future if a breach occurred. It is clear from R v Thames Water that cutting corners or holding a less than rigorous approach to environmental management can cost a company greatly;

If faced with an environmental breach, organisations will want to avoid any allegation that an offence has been committed deliberately or recklessly (and having rigorous systems in place can help to minimise this risk);

Organisations at high risk of committing offences may wish seek advice on how to avoid being placed in the "large" or "very large"category of organisation, as envisaged by the Sentencing Guideline, through potential re-structuring as these are the categories which will attract the most substantial fines;

and / or It may be increasingly attractive for organisations who have committed breaches to offer an "Enforcement Undertaking" to the regulator (where appropriate) as an alternative to facing sentencing from a criminal court. This is also more likely to be an attractive option now that the previous caps on the maximum fines in the Magistrates' Court have been removed. See the Spring Edition 2015 of the Freeths LLP Environment Bulletin for articles on Enforcement Undertakings and the expansion of the Magistrates' sentencing powers.Individual offenders

The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.