Business

Six-fold increase in average fines imposed by Environment Agency

Research from law firm Clyde & Co shows that the average fine per prosecution brought by the Environment Agency (EA) against companies has increased six-fold in the past five years.

The EA’s data shows that the average fine against a company has risen from £23,731 in 2013/14 to £147,575 in 2017/18 (see table below for more detail).

The average fine has significantly increased despite the number of prosecutions against companies falling to almost a quarter of the number five years ago; from 114 in 2013/14 to 32 in 2017/18.

Sentencing guidance introduced on 1 July 2014 toughened penalties for most environmental offences. Under the new approach, the scale of fines varies but can exceed £20 million for the most serious cases involving the largest companies.

Rod Hunt, partner at Clyde & Co, commented: "The environmental sentencing guideline has now been in force for almost four years and is biting hard.

"However, we believe the increase in average fine level is not only attributable to the sentencing guidelines but also the fact the EA is effectively deploying its full armoury of enforcement sanctions, and is more readily using enforcement undertakings for less serious offences while typically reserving prosecution for the worst offences and worst offenders. This has resulted in a decrease in the number of prosecutions but an increase in the average fine level.

"In 2016/17 we had the big ticket, multi-million pound (£20.3m) fine against Thames Water that really made its mark. The message to businesses is that the EA will continue to prosecute the more serious offences and offenders so ensure you are complying with your environmental obligations or risk potentially eye-watering fines in the criminal courts".

Prosecutions against directors remain high, with 22 prosecutions against company directors in 2017/18, compared with 25 in the previous year.

Senior associate at Clyde & Co, Dr Anna Willetts, said: "The data show that directors are clearly still at risk of prosecution. The number of director prosecutions remains very similar to last year and we expect the EA to continue to target those at the top for compliance failures.

"The EA is using everything in its arsenal to crack down on non-compliance. The significant increase in average company fines coupled with the continued targeting of company directors means complying with environmental regulation is, more than ever, a top priority for the boardroom."

Looking to continue its crackdown on waste crime, which costs the economy £600 million a year, the EA launched a raft of new waste crime powers this year, which entered into force on 29 March and were announced in January, when Resources Minister Thérèse Coffey also launched a consultation into how to tackle crime and boost performance in the waste sector.

Waste enforcement officers are now armed with body cameras to tackle incidents of abuse and are also able to block access to problem waste sites, not just illegal ones, and force operators to clear all their waste.

Last year, the EA also disclosed plans to map England’s landscape in its entirety by 2020, a project which will help combat waste criminals. The EA will create a high-quality map of the country using aircraft equipped with specialist laser scanners, and use the data to tackle waste crime by spotting sudden environment changes that could indicate the illegal dumping of waste.