Thames Water Fined £20.3 Million

24/03/2017

Following an admission that it pumped 1.9 billion litres of untreated sewage into the Thames river, Thames Water Company has been fined a jaw-dropping £20.3 million.

Although the fine amounts to just two weeks of the company’s profits, it sends a sharp warning to organisations who breach environmental laws that heavy fines can and will be imposed.  This can leave organisations, particularly SMEs, vulnerable if they do not have the resources available to mount a strong defence against a prosecution by the Environment Agency to mitigate a harsh fine being imposed.

Details of the incident

The untreated effluent was discharged into the Thames in Oxfordshire and Buckinghamshire over the course of several months in 2013/14.  People and animals became ill because of the contaminated water and causing the deaths of many fish and birds.

Environmental damage was also caused in the riverside towns of Henley and Marlow.

Harsh criticism

Judge Francis Sheridan made his frustration with Thames Water transparent, stating that he had to ensure the fine was, 

"sufficiently large that they (Thames Water) get the message".

He added: "What a dreadful state of affairs that is".

"Logbook entries reflected the pathetic state of affairs and the frustration of employees".

"Thames Water Utilities continually failed to report to the Environment Agency despite (managers) being fully aware of the issues and reporting governance."

He later said of the firm: "There is a history of non-compliance."

Judge Sheridan added that on several occasions, Thames Water managers had ignored environmental warnings and "risks identified by employees and others".

Sky News reported that at the handing down of the penalty, Anne Brosnan, the Environment Agency's chief prosecutor, stated, 

"Thames Water was completely negligent to the environmental dangers created by the parlous state of its works."

"Our investigation revealed that we were dealing with a pattern of unprecedented pollution incidents which could have been avoided if Thames Water had been open and frank with the Environment Agency as required by water company industry protocol."

Could sentences for failing to comply with environmental regulations follow the path of health and safety?

The Definitive Guidelines on Health and Safety Offences, Corporate Manslaughter and Food Safety and Hygiene Offences (the Guidelines), which came into force in February 2016, are revolutionary as they link the size of fines to company turnover.  This has resulted in a steady increase in corporate fines for health and safety breaches; for example, a fine of £3 million which was handed down to Cristal Pigment UK Ltd, a global chemical company, following the death of an employee.

If the sentencing of companies involved in an environmental law breach was to follow the same path as health and safety, linking penalty to turnover, many organisations, especially local bodies, could find themselves in dire financial straits.  A fine of £20.3 million may be absorbed by an organisation such as Thames Water relatively painlessly, but for NGOs and local bodies, who do not have the reserves to manage such a penalty, it could be crippling.  In the case of local bodies, the only way to service such a penalty would be to cut services or raise rates.

The importance of an experienced first response

With the prospect of hefty fines for environmental law breaches becoming more prevalent, getting the right support immediately, should a breach occur, is imperative.  Not only can an emergency response team manage your communication with authorities and Environment Agency investigators, but they can also collate evidence from expert witnesses and review your existing compliance policies to build a solid defence.

Defending a case involving breaches of environmental law can be extremely stressful.  A strong initial response provided by an experienced legal team can ensure a robust defence and the best chance of a positive outcome.