In this latest Environmental Law News Update, Christopher Badger and Doug Scott consider a Court of Appeal case clarifying the sentencing of Directors convicted of environmental offences, action from the advertising authorities on misleading green adverts and some optimism from the Head of the Environment Agency.
Court of Appeal clarifies Director sentencing
The judgment of the Court of Appeal in R v Anderson was delivered on 9th November 2022. The decision is not transformative, but does assist with some of the basic principles relevant to the sentencing of Directors who plead guilty to consenting or conniving in the commission of environmental offences by a company, or accept that those corporate offences were attributable to their neglect.
The first takeaway is acknowledging that the sentencing Court must form a reasoned view as to the overall harm of the offending and, when it comes to assessing the financial element of the offending in question, the Court is not restricted to an amount of money that might reasonably be awarded by way of compensation. Where there is a clear and sufficient nexus between, for example, the appellant’s offending and, as in this case, a need to clear a site in its entirety of waste, the Court is entitled to take into account the entire clean up costs even where an environmental permit had existed that would have allowed the storage of some waste.
The second is that where a Defendant persuades a Judge that it is not necessary to have a Newton hearing, suggesting that any disputes of fact can be resolved on the papers and through submissions, this does not mean that the Court is bound to accept the Defendant’s submissions where there is in fact a factual dispute. There is no principle that, in the absence of a Newton hearing, all disputed facts are required to be resolved in the Defendant’s favour.
The third is that there is no merit in a suggestion that a Court must divorce the financial benefit obtained by the company from the financial benefit obtained by an individual Director when assessing the overall seriousness of an offence. The concept of “piercing the corporate veil” is entirely irrelevant to the fact-finding exercise that a Judge must undertake in passing sentence. A Judge must assess the extent of the punishment that is appropriate for the Defendant’s role, bearing in mind the harm caused and his culpability.
The point of most interest is that relating to disputes of fact. The Court explicitly stated that it is unsustainable for an appellant to expressly forego the opportunity for a Newton hearing, encouraging the Judge to resolve contested facts on the documents, only thereafter to complain that the court failed to adopt the position preferred by the defendant. At no stage had it been submitted that the judge was required to resolve disputed issues in the defendant’s favour were there to be no Newton hearing.
It might have been argued that the Judge should have required a Newton hearing in the event that a factual dispute arose during the sentencing hearing that was capable of making a material difference to the sentence. However, rather than place that obligation squarely on the Court, the Court of Appeal instead considered that it was not open to the Defendant to complain about the approach taken, namely determining a factual issue on the papers, when the Defence itself had persuaded the Court to adopt that very approach.
Advertising Standards Agency takes action on misleading green adverts
A tweet from the Twitter account of Perfectly Green Ltd, a supplier of artificial grass products, posted on 20 May 2022, advertised their Soul Eco-grass product, with images and text that stated “New for 2022! [sunglasses sun emoji] Soul Eco-grass is recyclable [recycle logo emoji, thumbs up emoji] The PP backing means it’s also great for dog owners!”.
The environmental pressure group, Plastics Rebellion, complained to the Advertising Standards Agency (‘ASA’) challenging whether the claim that the product was recyclable was misleading and that the name “Soul Eco-grass” misleadingly implied that the product was eco-friendly, arguing that they believed that artificial grass was damaging to the environment.
In a ruling published on 9 November, the ASA found that consumers would understand the claim that Soul Eco-grass was recyclable to mean that the product was easily recyclable once it had reached its end of life cycle and that the recycling process would be available to UK consumers. In fact, mixed plastic materials, of which the artificial grass was made, gave poorer quality recyclate and, according to DEFRA, the UK did not have the necessary infrastructure to carry out the recycling process. In the absence of any qualifications noting the difficulties posed to the recycling of the product due to its mixed composition, and the lack of existing UK infrastructure to process it once it had reached the end of its life cycle, the ASA concluded that the advert was misleading.
The ASA also considered that the inclusion of the word “eco” in the name of the product implied that it was “eco-friendly” and it considered that the overall wording of the ad and symbols meant that consumers would understand that the product was “eco-friendly”. As the ASA had seen no evidence regarding the environmental impact over the course of the full life cycle of the product, the ASA concluded that the ad was misleading. The ASA drew attention to the extraction and subsequent processing of raw materials in order to produce artificial grass, as well as the fact that it could be used to replace real grass, thereby impacting on biodiversity, as factors relevant to its conclusion.
Perfectly Green Ltd were instructed that the ad must not appear again in its current form and to ensure that future marketing communications did not mislead as to the ease of recycling of their products and did not imply that their products were environmentally friendly if that was not the case. In fact, prior to the outcome, Perfectly Green Ltd had already stated to the ASA that they would remove the words “Eco-grass” from the name of the product and that no future marketing communications for the product would contain that name or claims which implied that the product was environmentally friendly.
Green environmental claims are likely to have more and more prominence, particularly in circumstances where society is much more conscious of the potential for a product to have an environmental impact. The rules on environmental claims can be found in Section 11 of the Non-broadcast Code and Section 9 of the Broadcast Code, both published by the ASA and found here. In addition, the Consumer Protection from Unfair Trading Regulations 2008 are intended to protect consumers and prohibit unfair marketing to consumers, which can, depending on the circumstances, include misleading advertising.
The decision of the ASA can be found here
Salvation from “climate hell” possible according to the head of the Environment Agency
One could be forgiven for feeling a sense of despair after hearing the Secretary-General of the UN, António Guterres, tell COP-27, “we are on a highway to climate hell with our foot still on the accelerator”. Well, brush that pessimism aside because Sir James Bevan, the Chief Executive of the Environment Agency, has a message of hope.
Less than 24 hours after the Secretary-General’s speech, Sir James told an audience in London, “not only can we fix the climate emergency and build a better world, but … we will”. Describing himself as a realist, rather than an optimist or a pessimist, Sir James went on to justify his upbeat prediction. Firstly, he noted that we know exactly what the problem is – excessive greenhouse gas emissions from human activity. The solution is also known. Reduce those emissions. He bluntly said, “it’s not rocket science”.
The other reason for optimism is that we are starting to tackle the problem in four key areas. The first of those is that international cooperation, through the conduit of the UN, is setting emission targets to meet. And, it should be said, the cooperation is working – projections on global warming by the end of the century are now clearly less than the 3.5°C predicted when the Paris Agreement was signed in 2015. The second area is an acknowledgment by national governments that they need to implement policies to reduce their own emissions; Sir James referenced successive UK governments as leading in this area. Thirdly, he recognises that businesses are “[stepping] up to the plate” in adapting to low-carbon operations, not only because it’s the right thing to do but because it’s the only way to commercially survive. The final factor is that individuals are changing the way they live to reduce their environmental footprint and are pressuring their governments – democracies and dictatorships alike – to act.
Sir James turned to reflecting how the Environment Agency are taking steps to reduce their own and others’ emissions. He stated that since 2010, those they regulate have cut their greenhouse gas emissions by 50% and the Environment Agency itself is committed to being a Net Zero emitter by 2030.
At COP-27, the Secretary-General told delegates that adapting to climate disruption is going to cost the world $300 billion a year by 2030. The Environment Agency, Sir James said, is alive to these challenges and is actively building up the country’s resilience to climate change through building flood defences and playing a major role in the planning system.
Whilst optimistic, Sir James is not naïve. In similarly stark terms to the Secretary-General he said, “we must adapt or die”. He recognises the challenge is substantial, but he ended his speech – as good ones do – where he started; with a message of hope, “if we tackle the climate emergency effectively … then I do think that we can and we will create the better world we all want”.
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