In early July 2021, Southern Water was fined £90m, setting a new sentencing record for environmental breaches in England. The company pled guilty to 6,971 illegal spills over a five year period across several sites.
A total of 16 to 21 billion litres of untreated sewage was pumped into what the sentencing judge described as "some of the most precious, delicate environments in the country". Nearly all of the waters affected were under domestic and international environmental protection. The spills had significant implications for the shellfish industry, making businesses unviable due to contamination of the shellfish.
Part of the prosecution case, which followed the largest investigation undertaken by the Environment Agency to date, was that Southern Water had been "very significant[ly] under-reporting" the number of illegal pollution spills made.
The prosecution featured 51 charges (the company pled guilty to all of them); the investigation uncovered evidence of breaches being committed 'with a view to profit'; several previous warnings from the Environment Agency had been ignored; the breaches/issues with infrastructure resulting in the breaches were not at the highest level within the company; and the company's co-operation with the investigation was described as "grudging, partial and inadequate".
The items listed all fall into the category of "aggravating factors" in terms of the sentencing guidelines for a case of this nature, which act to increase the level of penalty. The penalty level was, arguably, unexpectedly high but it is understood that fine imposed is equal to the level of penalties that would have been imposed by the Environment Agency, had the company fully disclosed its breaches as it was required to do.
The sentencing judge said the fine imposed should be a deterrent to other companies and hoped it might prompt shareholders to hold companies to account and encourage better regulatory compliance.
The previous 'record' fine was just over £20m imposed in 2017. This case accordingly represents a very significant jump in the fine level but is also further evidence of the increased importance Health, Safety & Environmental issues have for the public and for business. It is a clear indication of how seriously such breaches will be treated by the regulators, prosecution services and the courts.
Contributor
Senior Associate
