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Companies should think carefully about trying to raise 'abuse of process' arguments in environmental cases, says expert

OPINION: Companies caught breaking environmental laws and regulations should not waste time trying to claim that the regulator is abusing the legal process because that tactic almost never works. 13 Nov 2012

The number of prosecutions under environmental regulations is on the increase and those companies which are caught out need to focus their efforts on battles they can win. Abuse of process will very rarely be one of those.

When the Environment Agency suspects a breach has occurred  it has two jobs. The first is to ensure the compliant operation of the business and the second is to punish the company for the breach. What companies need to recognise is that these are two processes that will run in parallel.

Too often companies engage with a representative of the Environment Agency to ensure the compliant operation of their business. They build up a relationship with the officer and work hard to demonstrate to them that they want to and will comply with the their environmental permit or other legal obligations.

Companies are shocked, then, when once future compliance is assured the Agency begins legal proceedings against them. Often a company will attempt to argue that this prosecution is against the spirit of negotiations, that it is an abuse of legal process.

This almost never succeeds – a court will set a very high bar for abuse of process arguments. If the Environment Agency made a binding commitment not to prosecute to win concessions from a company and reneged on that promise there would be a case, but anything short of an explicit commitment is likely to be rejected by a court.

Companies must understand that the Environment Agency is under an obligation to consider prosecution and to go ahead with it if they have the evidence and it is in the public interest. Environmental incidents are categorised into four groups – if an incident is in categories  one or two then there is almost certain to be a prosecution unless there are other extenuating circumstances.

Companies should instead focus their attention on parts of the legal process that they can have an impact on.

A company;s cooperation with the regulators during the investigation process often does have a number of benefits. It helps to maintain a positive relationship with the regulator. It can also be used as very effective mitigation to reduce the level of any fine

Other aspects of the legal process that companies should consider include the issue of which court hears a case. Environmental cases will start in a Magistrates Court, and this is where companies should usually seek to keep them because for now fines are capped at £50,000 per incident. In  the Crown Court they are uncapped.

This could all change if the Government uses powers to remove the cap on fines that Magistrates Courts can levy. The expectation is that this change is unlikely to be implemented in the near future, but it is one that companies need to be aware of.

There is a risk to this because a Magistrates Court will not have the level of expertise for sometimes highly technical cases that a Crown Court might be better suited to dealing with, but often the benefits outweigh this because a company has certainty from the start of the process that the worst result will be a £50,000 fine per incident.

The Environment Agency will sometimes push for a Crown Court hearing but companies can successfully argue against that, and there is evidence to show that Crown Court judges tend to resent these cases landing with them as the fines they impose are often within the limits of the fines that the Magistrates Court could have imposed.

Sometimes, though, a company might want to consider pushing the case to the Crown Court especially if there was no longer a difference in the sentencing power of the Courts and if it felt that the Environment Agency case might be rejected by a jury. If a company thinks that the Agency is being overly technical or picky, they might think that a jury  might be likely to side with it.

This kind of strategic case management will only become more important in the coming months and years because fines and penalties for environmental breaches are on the rise. This is because the Environment Agency is focusing its attention more determinedly on the more significant offences and also because there are a number of changes in the pipeline concerning the sentencing of environmental offences. This, alongside the introduction of civil sanctions for lesser more technical breaches, will ultimately mean that the courts will only see the most serious cases

Odour and noise related cases are also increasing in frequency, in part because waste management processing is becoming more centralised and like many manufacturing operations these activities are increasingly being carried out closer to residential areas.

This makes it vital that companies are aware that some legal tactics are not worth pursuing, and that attention is for example focused on the venue for any prosecution or the benefits from cooperating which are likely to pay bigger dividends than attempting to prevent the prosecution with an argument that it represents an abuse of legal process.

Simon Colvin is an environmental law specialist at Pinsent Masons, the law firm behind Out-Law.com