A tougher environment for water companies?

A District Judge in Southampton recently gave permission for a private prosecution to proceed against Southern Water. The prosecution is being brought by charity Fish Legal, which claims the water company should be held criminally responsible for a diesel pollution incident which took place in the River Test. The prosecution is being funded by membership subscriptions, donations and legacies.

Under s.6(1) Prosecution of Offences Act 1985, any person in England and Wales has the right to privately prosecute another person (individual or company). It is a power used by charities and other organisations which do not themselves have a separate statutory right to bring a criminal action.

A private prosecution begins with a magistrates’ court reviewing the ‘information’ and deciding whether to issue a summons or warrant. A defendant may challenge this decision by way of judicial review. Under s.6(2) of the same act, the Director of Public Prosecutions (DPP) has the power to take over (and potentially discontinue) a private prosecution at any stage. In some cases, a private prosecutor must first seek the consent of the Attorney General or DPP.

It is both difficult and costly to take a private criminal action to trial stage (although the RSPCA has developed considerable expertise in this area and secures numerous convictions every year). A well-known example of a failed attempt was the case brought by Brexit Justice Limited and Marcus Ball against Boris Johnson in May 2019, alleging misconduct in public office based on misleading statements (including one displayed on the side of a bus). Westminster Magistrates’ Court decided there was a proper case to issue a summons against Mr Johnson, but this decision was quashed by the High Court shortly afterwards, in a robust judgment.

In the recent case brought by Fish Legal, District Judge Peter Greenfield found no reason why the case should not proceed, despite arguments to the contrary by Southern Water and the Environment Agency (“EA”), which is conducting its own investigation. The judge’s decision means that Southern Water will receive a summons and be required to appear in court in February 2024 to answer the allegations.

Although the outcome of the Southern Water prosecution is far from certain, the publicity generated by success at the first stage of the case may encourage other environmental activists to follow suit, increasing the pressure on water companies and others involved in potentially environmentally sensitive activities.

High stakes

The potential penalties, should a prosecution succeed, are significant. Since 2015 the criminal courts have been empowered to impose unlimited fines for environmental (and other) offences, subject of course to the relevant sentencing guidelines which take into account, among other things, the seriousness of the offence.

Thames Water has seen the effect of these powers. On 26 February 2021, the operator was fined £2.3m after it pleaded guilty to charges brought by the EA in relation to an incident in 2016 when untreated sewage leaked into a stream that led to the River Thames at Henley. This followed a fine of £2m in 2019 for a sewage pollution incident in the Cotswolds, and a record-breaking penalty of £20m in 2017 in relation to a spillage of untreated sewage into the River Thames.

Low levels of criminal enforcement vs stiffer civil penalties

However, despite some headline-grabbing cases over the past years, levels of criminal enforcement for environmental offences remain relatively low. This trend is likely to continue.

The recent gateway decision in Fish Legal v Southern Water follows the government’s decision to scrap the £250,000 cap on civil penalties which the EA and Natural England may impose directly on operators for environmental misconduct, without needing to go through a criminal process. The government has also given the agencies powers to levy higher penalties as a civil sanction for more offences under the Environmental Permitting (England and Wales) Regulations 2016.

Even before this change, both the EA and Natural England have made no secret of the fact that, while they will use their criminal enforcement powers where necessary, they lean towards issuing civil sanctions. The civil process is of course swifter and the standard of proof is lower. By way of example, Natural England’s most recent annual enforcement report covering 2018 to 2022, revealed that its most active area of enforcement was in relation to Sites of Special Scientific Interest; for which there were 21 offences recorded, with 12 civil sanctions issued but no criminal enforcement action taken.

The EA has a range of civil sanctions at its disposal in relation to many of the offences it is responsible for enforcing. The EA’s current Enforcement and Sanctions Policy makes clear the agency’s proportionate approach, which generally begins with the issuance of advice, guidance or a warning. The policy states that the EA “will normally consider all other options before considering criminal proceedings”, with prosecution seen as a “last resort”. On 8 October, the EA closed an eight-week public consultation on how exactly the changes to so-called variable monetary penalties, as summarised above, would be implemented in the Enforcement and Sanctions Policy; but it is unlikely that the general approach will change. On the contrary, the expansion of further civil powers is likely only to result in the EA focusing further on this means of enforcement.

Over the next few years, water companies and other operators may therefore find themselves subject to more enforcement actions, with stiffer financial consequences, but perhaps without such a heavy threat of criminal sanctions – except when faced with a private prosecution or in the most serious cases.