Environmental Law News Update

September 15, 2021

In this latest Environmental Law News Update, Gordon WignallChristopher Badger and Natasha Hausdorff consider sentencing remarks in Environment Agency v Southern Water, the removal of climate commitments from the Australia trade deal and House of Lords amendments to the Environment Bill.

Environment Agency v Southern Water

No-one will ever want to read another case about such degrees of pollution as those deliberately and cynically caused by Southern Water, which was sentenced on 9 July 2021: seven years of untreated sewage discharged into coastal waters over a 6 year period. The fine of £90m (reduced by a third for an early plea) was widely publicised.

What can the sentencing remarks tell us about the judicial application of the Environmental Offences Definitive Guideline even where a very large organisation is not the defendant?

EA v Southern Water is best seen in conjunction with Regina v Thames Water Utilities Ltd, Practice Note [2015] EWCA Crim [2015 1 WLR 441, the first definitive guidance case which was heard by the Court of Appeal, and on which Southern Water draws.

The overarching message must be that, save in cases of low culpability where there is very minor harm, judges can be expected to sentence with full regard for punishment and deterrence: companies can expect to be hit hard in order to drive home the message that environmental damage will not be tolerated. The higher up the scale the offending falls, the more rigorously this principle will apply.

To mitigate the sentence, there must be the most extensive cooperation with the regulator, very early and genuine attempts to prevent the same incident from occurring, the earliest and most unhesitating expressions of genuine remorse and the prompt engagement of the most senior members of the board of directors.

In examining culpability, Mr Justice Johnson in Southern Water was prepared rather to stretch the evidence before him to draw inferences against the board of directors and even to establish a counterfactual world which would have existed if the board of directors had set up adequate working systems. The Court of Appeal in Thames Water, adopting the wording of the definitive guidance, was concerned only with the conduct of the “organisation as a whole”.

The cases show that nice distinctions on the facts and elaborate accounts of a company’s finances are of very limited assistance to a defendant.

In Southern Water Johnson J. took one specimen count, applied the culpability / harm matrix under the guidance, adopted a suitable starting point, and considered the aggravating and mitigating factors before deciding on the appropriate totality of the fine. He then established his own methodology for examining the economic benefit of the offence (applying a cross-check by an alternative assessment) and added this to the fine, ensuring that he considered the fine proportionate to the Defendant’s means. He then reduced the fine to reflect the plea, proportioning the total sum out among individual offences.

It is clear from both authorities that a sort of logarithmic sense of judicial exasperation will be applied to the combination of a defendant’s lawlessness and the extent of the environmental harm it causes.

At the same time, anyone needing to make clear their case in mitigation must do so fully, realistically and openly, in accordance with the correct procedures and in good time for the first hearing. There can be few other cases in which it is correctly said that a first hearing is not a dress rehearsal. There must be a correct basis of plea, the agreement of the prosecution must be obtained as necessary and the case must be correctly listed with the full cooperation of the judiciary.

Climate commitments removed from Australia trade deal

Is this evidence that the UK is prepared to prioritise trade over the environment?

It has been reported that the Government removed references to temperature goals from the deal and that the Australian prime minister is supposed to have asked for key Paris agreement climate commitments to be watered down.

Part of the issue may be that the Government needs to be seen to make Brexit a success. As one “government source” told the Telegraph in May: “If we can’t get Australia over the line, then we’re partly accepting our centre of gravity still revolves around Europe.”

The Government has estimated a gorecast benefit of a 0.02% boost to GDP over 15 years as a consequence of the trade deal.

The changes appear to make the Australia deal weaker than the Brexit agreement with the EU. According to European Commission data, Australia is the second-largest exporter of coal in the world and has a high per capita carbon footprint. The country has a notoriously weak record on climate action.

The UK’s Department of International Trade has stated that there will be a substantive article on climate change which reaffirms both parties’ commitments to the Paris Agreement and achieving its goals. However, the Department would not confirm whether “1.5°C” would actually be included in the agreement.

One potential inconsistency between the parties was that while the Australian Prime Minister stated emphatically that this was a trade agreement, not a climate agreement, the UK Government sought to argue that there were already a lot of environmental safeguards in the trade deal and that the text implicitly committed Australia to the Paris Agreement.

However, the failure to expressly refer to 1.5°C does imply that Australia is not as committed to the goals of the Paris Agreement as might have been considered when it was ratifed.

House of Lords amendments to the Environment Bill

As the House of Lords continues its scrutiny of the Environment Bill in Report stage, the Government was defeated in several votes. Peers agreed to amendments relating to the independence of the Office for Environmental Protection (OEP), exemptions from environmental legislation, the powers of Courts and the question of whether interim targets should be binding on Ministers.

Lord Krebs (Crossbench) was successful in proposing that the OEP should have “complete discretion in the carrying out of its functions”, including in preparing its enforcement policy, exercising its enforcement functions and preparing its budget, and that the consent must be obtained from the Environment, Food and Rural Affairs and Environmental Audit Committees for any changes to senior OEP appointments.

Baroness Parminter (Liberal Democrat) was successful (by two votes) in her amendment to remove exceptions for the armed forces, defence policy, tax, spending and resources from the requirement to have due regard to the policy statement on environmental principles.

Lord Anderson of Ipswich (Crossbench) won an amendment to allow courts to grant any remedy for non-compliance by an authority with environmental legislation that it could were a judicial review taking place.

Baroness Brown of Cambridge (Crossbench) was successful in advancing a statutory duty on the environment secretary to meet any interim targets set, bringing those targets into line with the suite of legally binding, long-term environmental improvement targets and the interim milestones in the Climate Change Act.

Further amendments, to be considered by the House this week, cover a range of subjects, including:

  • reducing single-use items;
  • reducing the risks to pollinators, such as bees, from pesticide use;
  • lowering speed limits to improve air quality;
  • establishing air quality improvement areas; and
  • monitoring and reducing storm overflows. 

It remains to be seen what impact the Government’s defeats and the further proposed amendments will have once the Bill returns to the House of Commons, given the Government’s majority.

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