Large companies guilty of serious waste and nuisance crimes will face fines of up to £3 million from 1 July
Penalties for environment crimes in England and Wales are set to increase significantly after the Sentencing Council published its first guidance on fines for environment-related offences.
The new guideline introduces a tariff system, where the level of fine imposed is decided in relation to the level of harm caused, the culpability of the offender – whether the offence was committed negligently, recklessly or deliberately – and the size of the organisation.
Large businesses (with a turnover of £50 million) will be liable for fines of up to £3 million per offence if they deliberately breach legislation and cause major harm to the environment. The penalty is 33% more than in the maximum fine proposed by the council in its draft guidance last year, and a similar increase has been made across the board in response to feedback.
Under the new advice, the minimum fine a large company can expect to pay for the most minor offence is £7,000. In cases where a firm negligently causes minor pollution, the guideline states that the courts should impose a £60,000 fine.
The new guidance, comes after the council reviewed sentencing practices for environment offences and concluded that some fines were “too low and did not reflect the seriousness of the offence”.
In publishing the guideline, the council confirmed that the changes were aimed at ensuring courts impose fines that are “proportionate” with the means of the company.
“Corporate offenders committing serious offences, who are likely to be those causing most damage or risk to health, are expected to get higher fines,” it said. “There are unlikely to be significant changes to penalty levels for lower level offences.”
Simon Colvin, partner and head of the environment team at Weightmans LLP, said the new guideline will be particularly worrying for firms in heavily-regulated sectors, such as utilities companies.
“The guideline makes it clear that relevant recent convictions and a history of non-compliance will be significant aggravating factors. This will be concerning for water companies in particular,” he said.
The new guideline was welcomed by the Environmental Services Association (ESA), which represents the UK’s waste sector. The body’s director general, Barry Dennis, said: “For many years we have expressed concerns that courts do not have sufficient guidance or receive sufficient training on dealing with environmental offences.
“They often do not fully appreciate the seriousness of such crimes, and therefore impose inadequate sentences. We would like to see a transfer of environmental knowledge to the courts, enabling them to impose appropriate sentences, and we hope this guidance will further this aim.”
Colvin predicts that the higher penalties introduced by the guideline will help raise environmental compliance up the boardroom agenda, but also that they will result in more drawn out and hard fought legal cases because the penalty for being found guilty is much more significant.
“If a defendant can reduce the number of charges it faces or reduce the categorisation of the offence, this will have a significant benefit in terms of the level of fine they will be facing,” he said. “A new world of environmental compliance will begin on 1 July and everyone will be waiting to see who is unlucky enough to be first before the courts.”
The new guideline covers waste, permitting and nuisance offences under s.33 and s.34 of the Environmental Protection Act 1990; reg.12 and reg.38 of the Environmental Permitting (England and Wales) Regulations 2010; and s.1 of the Control of Pollution Act 1989. These include waste handling or disposal offences, including fly-tipping and sewage spills, as well as incidences of noise, smoke, dust or smells that pose a pollution risk.
While the council warns against the courts using the levels of penalties listed in the guideline for broader environmental offences, it says the general approach can be applied.
However, Ross Fairley, partner in Burges Salmon’s environment law team, warns that the guideline could have a much broader impact.
“While the guideline is confined to certain offences, and not supposed to be implemented until 1 July, the reality is that magistrates will have it in the back of their minds,” he said. “Most magistrates do not come across environment offences very often and look for any guidance on what fines they should award. The new guideline may have the side-effect of increasing fines for environment offences across the board.”
With the guideline requiring courts to consider the finances of companies in passing sentence, Fairley reminds firms that they will have to produce evidence of their accounts. “What evidence you produce to the court is important, as the organisation’s financial status will significantly influence the fine,” he said.
The sentencing guideline also makes it clear that in the case of “very large companies” – those with annual turnovers that far exceed the £50 million threshold – fines even bigger than those outlined “may be necessary… to achieve a proportionate sentence”.
Simon Colvin is hosting an IEMA webinar on the new sentencing guideline on 11 March, 12.30pm-1.30pm. To register for the webinar click here.
Also, to read Colvin’s detailed analysis of the new guideline click here.
