In a recent unreported decision, the courts gave some helpful guidance on the interpretation of the Environmental Offences Sentencing Guidelines (EOSG).
The case concerned a discharge of sodium hydroxide solution into a river. As a result, around 30,000 fish were killed and the pollution negatively impacted the invertebrate community down the river for a distance of between 4km and 5.5km. The following three points were discussed and clarified by the court.
The prosecution argued that the incident was reckless because measures were not put in place or enforced as would reasonably be expected.
The defence disagreed, they contended that the culpability for the offence was negligent, as the defendant failed to take reasonable care to put in place and enforce proper systems. There is no clear distinction between a "reckless failure" and a "failure" to put in place control measures in the Guidelines.
The defence referred to the Environment Agency's 2015 "Enforcement and Sanctions – Guidance" which considers "reckless" to mean "acts that are committed internationally without regard for the consequences and or the environmental harm that results".
The Court held the offence should be classified as one of negligence and that the approach to assessing culpability should be to look at the incident as a whole rather than incrementally. This was despite the Judge making very critical comments about the defendant’s "inexplicable" lack of procedure to avoid or mitigate against the consequences of their primary control failing, as occurred.
Interestingly, the Environment Agency's 2015 "Enforcement and Sanctions – Guidance" was withdrawn on 11 April 2018. However, the Court’s approach should still be to assess the incident as a whole to determine culpability.
The prosecution argued that the category of harm was category 1. The polluting matter was of dangerous nature, there had been a major or very significant adverse effect on water quality and animal health.
The defence responded that the category of harm was category 2. There was no permanent harm, a full recovery of invertebrates was expected, and there were no adverse effects to human health. The defence highlighted that there is no definition of "major" or "significant" in terms of the adverse effect to the environment caused by the incident. It was submitted by the defence that the EOSG needs to be understood as a whole, an overall assessment must be made rather than focusing on the presence of a single bullet point in any one category.
The Judge agreed. There was definitely a risk of major adverse effects of damage to air or water quality (which falls under category 1). However, the remaining requirements of category 1 were not met and there were category 2 and 3 features present in this case. Given a "risk of major adverse effects" is included in category 2, the Judge was satisfied that the degree of harm attributable to the incident was at the higher end of category 2.
This is a case where it was necessary to move outside the ranges suggested by the guidance in order to achieve a proportionate sentence. The principle to be followed is that the fine must be large enough to bring the appropriate message home to the directors and shareholders of the offender.
It was submitted by the prosecution that, the EOSG provides for two step back provisions. Firstly at step 4, where there is a proportionate increase of the amount to be fined to reflect the turnover of very large companies. And secondly at step 6, where a further increase in order to bring the appropriate message home to the directors and shareholders and to punish them is applied.
The defence argued, and the Court agreed, that this could have the effect of counting a "very large" company’s turnover twice. The Judge accepted that this cannot be the intention of the guidelines in assessing proportionality – that would be double counting. He added that Step 6, in his judgement "only comes into play, if and when a factor(s) over and above turnover requires a message to be sent to directors and shareholders and to punish them.
In conclusion, it is clear that deploying the Environment Agency's own guidance and structure in mitigation arguments is critically important. The Guideline is lacking in detail and using objective evidence from the regulator’s own policies is likely to assist the Court in its assessments whilst undermining the more extreme interpretations advocated by the prosecution in this case.
This case provides some clarity for the energy utilities sector. If you have any queries or require industry specific regulatory advice, please do not hesitate to get in touch to discuss this further.
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at June 2018. Specific advice should be sought for specific cases. For more information see our terms & conditions.