Thames Water Utilities Ltd, R v

On a sentence appeal, fresh evidence challenging the factual basis of sentence should generally be refused where the appellant could and should have advanced it below. The statutory requirements for admitting such evidence apply, save for genuinely fresh information about the offender.

For a very large commercial organisation, a fine for an environmental offence must reflect culpability, harm and the offender’s financial circumstances in the round. The court must not mechanically extrapolate the guideline ranges for large companies. A proportionate fine must have a real economic impact and bring environmental compliance home to management and shareholders.

Untreated sewage was discharged from a pumping station operated by Thames Water into a brook running through a nature reserve. Thames Water pleaded guilty to an offence under the Environmental Permitting (England and Wales) Regulations 2010. At Reading Crown Court, the Recorder imposed a fine of £250,000, a victim surcharge and costs.

Thames Water appealed against the amount of the fine. It also sought to adduce substantial fresh evidence to challenge findings that it should have replaced repeatedly failing pumps before the incident and had failed to respond to alarms. The appeal raised the proper admission of fresh evidence on a sentence appeal and the sentencing approach for a very large commercial organisation.

1. Appeal dismissed. The Recorder was entitled to find that Thames Water’s culpability was negligent. Its negligence consisted both of failing to replace the pumps before September 2012 and of failing to respond, timeously or at all, to repeated alarms. The fine of £250,000 was lenient, but there was no basis to reduce it.

2. The Court refused to receive the proposed fresh evidence under Criminal Appeals Act 1968, section 23. Apart from genuinely fresh information about an offender, an appellant must satisfy the statutory conditions. The company had conducted the sentencing hearing on the basis that the Recorder could find that the pumps required replacement. If it wished to dispute that factual basis, it should have set out a written basis of plea and adduced supporting evidence below. It could not advance a materially different case for the first time on appeal. Such permission would be exceptional.

3. For very large commercial organisations, the statutory starting point remains sections 142, 143 and 164 of the Criminal Justice Act 2003, as explained in R v Sellafield Limited [2014] EWCA Crim 49. The court should assess culpability and harm under the environmental-offences guideline, follow its other relevant steps, and examine the offender’s financial circumstances in the round. It is neither bound by nor required to begin with the fine ranges for merely large companies.

4. A fine must be just and proportionate, but sufficiently substantial to affect the company economically and bring compliance home to its directors and shareholders. In the gravest Category 1 cases involving deliberate conduct, a fine may reach a substantial percentage of pre-tax net profit, even above £100 million. Lesser harm may nevertheless justify fines measured in millions. There must be no mechanistic extrapolation from the guideline figures for large companies.

5. Previous negligent environmental offending may be seriously aggravating, especially where repeated operational failures reveal inadequate management attention. Prompt remediation, co-operation, a guilty plea and voluntary expenditure amounting to reparation are mitigating. Very large statutory undertakers cannot eliminate every unauthorised discharge, but size assumes greater importance where negligence causes harm or offending is repeated.

The Court further observed that sentencing such organisations is a Class 2C matter under the Criminal Practice Directions and that the applicable allocation requirements must be observed strictly.

• Court of Appeal (Criminal Division): In [2015] EWCA Crim 960, dismissed Thames Water’s appeal against the amount of its fine.
• Crown Court at Reading: On 29 August 2014, Mrs Recorder Arbuthnot fined Thames Water £250,000 following its guilty plea to an environmental-pollution offence.
• Reading Magistrates’ Court: Thames Water pleaded guilty on 18 July 2014 and the case was committed to the Crown Court for sentence.