The Court of Appeal’s decision in R v Thames Water Utilities  EWCA Crim 960 is notable for two reasons. Firstly, the Court of Appeal clearly warns those responsible for potentially harmful materials that sentences for environmental crime will be high and that extra care is therefore both warranted and advised. Secondly, and more importantly, the decision reveals the judicial attitude to the new sentencing guidelines from the Sentencing Council. These guidelines were noticeable for their treatment of environmental damage and it is pleasing to note that the Court of Appeal is applying those guidelines clearly and with the strength which was intended.
The case involved repeated discharges of sewage material into an Area of Outstanding Natural Beauty managed by the National Trust. The discharge was caused by the blockage of pumps within the sewage system. The offenders, Thames Water, had been warned of the blockage by their alarm systems, but had repeatedly failed to act to remedy the problem with sufficient speed. They admitted the regulation 38 offence of deposit of controlled waste without a permit (Environmental Permitting (England and Wales) Regulations 2010, SI 2010/675).
The appeal was purely as to sentencing. The first part of the case concerned whether or not Thames Water were able to adduce fresh evidence relevant to sentencing. The Court refused to consider this evidence. The more important aspect of the decision concerns Mitting J’s consideration of the Sentencing Guidelines (issued by the Sentencing Council and effective from 1 July 2014). More specifically, the question concerned whether the Recorder was entitled to take the approach she did to very large companies. To assess this, some consideration must be made of the Sentencing Guidelines. The Guidelines give assistance to the courts in assessing the level of fine appropriate for different sizes of corporate offender, from micro to large. For very large companies, it is suggested that a different approach may need to be taken in order to ensure that the penalty is, “proportionate” to turnover and profit (p. 12). To achieve this proportionality, and considering the very high turnover (£1.9 billion) and profit (£346 million) of Thames Water, the Recorder had multiplied the “range” of appropriate fine for large companies by three. The argument for counsel was that this produced a category of “very large company” for which the statute and guidelines made no provision. In brief, it was suggested that the approach was too mechanistic and too rigidly tied to the range of fine appropriate to a large company.
Instead, the Court of Appeal held, the Recorder should have taken approach which reflected more fully the goal of sentencing as explained in R v Sellafield Limited  EWCA Crim 49. Thus, she must first consider the seriousness of the offence by taking account of Steps 3 and 4 in the Sentencing Guidelines. When considering steps 5-11, the Court should also take account of the financial circumstances of the offender (section 164 Criminal Justice Act 2003). In so-doing, the court should not feel tied to the fines indicated as appropriate for large companies in the guidelines. Instead, as the Court goes onto highlight, the fine should be sufficiently high to deter future breaches.
The citation demonstrates the full and clear explanation given by the Court of the approach that ought to be taken in such cases.
It was suggested very strongly by the Court that a fine in the millions may well be an appropriate one. The most striking thing about the judgment here is the reference by Mitting J to stripping a corporation of 100% of its profits for a year in order to impose a sufficiently clear sanction to encourage management to prevent negligent or reckless action in the future. In the instant case, the offender was clearly reprimanded for having received repeated fines for similar environmental offences without sufficient precautionary measures being implements. This suggests a strict judicial attitude to environmental crime and highlights increasing recognition of the importance of environmental protection. It also highlights the importance of step 6 of the Sentencing Guidelines – proportionality between fine and the means of the offender. This is not just a “downwards” proportionality assessment, but, in the case of very large corporate offenders, it may also be an upwards assessment, ensuring that the deterrent effect of a very high fine is firmly in place. This is clear from the Sentencing Guidelines, (p. 12), but the relative lack of experience of sentencing for environmental offences may well have encouraged a timid approach. It is heartening to see that the Court of Appeal is clearly willing to be bold with its approach to sentencing for environmental crime.