Personal Liability of Directors and Officers for Offences Committed by their Company Against the Environment
While a company may be responsible for an environmental offence, in certain circumstances that responsibility does not remain confined to the company and can extend personally to a director and other senior company officers.
The number of prosecutions being commenced by the authorities following offences that cause environmental harm is very much on the increase. The Press is constantly reporting on the substantial fines and prison sentences being imposed by the Courts for criminal activities such as fly-tipping, unlawful waste disposal and the release of harmful chemicals into rivers.
Directors and officers in charge of companies committing environmental breaches should take note that offences damaging the environment are likely to attract civil proceedings, criminal prosecution, or both.
Whilst the illegal conduct may be carried out in the name of a company, any such act or default arising from the direction or default of a director or senior company officer may result in that person also being found personally culpable for the offence.
John Veale a Partner at KANGS outlines the relevant law and provides an illustration of the courts in action.
The Relevant Law
The Environmental Protection Act 1990 states:
S. 157 Offences by bodies corporate.
- Where an offence under any provision of this Act committed by a body corporate is proved to have been committed with the consent or connivance of, or to have been attributable to any neglect on the part of, any director, manager, secretary or other similar officer of the body corporate or a person who was purporting to act in any such capacity, he as well as the body corporate shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
- Where the affairs of a body corporate are managed by its members, subsection (1) above shall apply in relation to the acts or defaults of a member in connection with his functions of management as if he were a director of the body corporate.
An Illustrative Case | Breach of an Environmental Permit
Two company directors operated L Ltd (‘the company’) under an Environmental Permit.
The company operated a waste processing site in Worcestershire which was located next to a canal designated as a Site of Scientific Interest. The company’s Environmental Permit required the implementation of a management system to identify and reduce pollution risks, with fire being an evident hazard.
Between August 2012 and December 2012, the company stored excessive quantities of waste at the site in breach of its Environmental Permit despite warnings given by the Environment Agency.
A serious fire occurred in December 2012 when waste self-combusted. Despite this fire and further warnings from the Environment Agency and Hereford and Worcester Fire and Recue Service, the company continued to accept waste. Thousands of tonnes of excessive waste, which should have been disposed of, were simply stored at the site to avoid the cost of its disposal.
Despite the warnings from the authorities, its own employees, a Critical Risk Evaluation issued by the company’s insurers, and assurances given to the Environment Agency that no similar incident would occur again, no effective corrective measures were implemented.
As a result of the ongoing failures, a second fire occurred in June 2013 which burned for eight weeks resulting in a major impact to the environment and local community. Serious pollution included contaminated fire water escaping into the canal leading to the deaths of approximately three thousand fish and drinking water supplies being threatened.
It was discovered that the company was uninsured following the initial fire and, as insolvency proceedings had commenced, the Environment Agency, Fire Service, Wyre District Council and Worcester County Council had to pay thousands of pounds to demolish the building, extinguish the fire and control pollution until the site was eventually sold.
Both company directors were charged with four offences under the Environmental Permitting (England and Wales) Regulations 2010.
In early 2019, at the Crown Court in Worcester, both defendants pleaded guilty to all counts. They were fined and received suspended prison sentences and ordered to carry out many hours of unpaid work.
Official Comment
Speaking after the case, an Environment Agency spokesperson said:
“These directors operated their waste recycling facility in a way that blighted the community with flies, vermin and odour, and put people’s health and businesses at risk by not adequately assessing and controlling the risks of fire.
They continued to operate with flagrant disregard after the first fire with no insurance and no fund set aside to manage these risks, leaving the taxpayer to pick up the bill when an incident occurred and creating misery for their neighbours.”
How Can We Help?
Company Directors and senior company officers may face a variety of personal sanctions if their company is convicted of an environmental offence. These can include substantial fines, imprisonment, director disqualification proceedings, Proceeds of Crime Act (POCA) proceedings in addition to any other financial penalty imposed on the company.
The Environment Agency has the power to impose Variable Monetary Penalties on companies for environmental breaches. While these penalties were previously capped at £250,000, that limit has now been removed, exposing companies to potentially unlimited financial penalties
The consequences of ignoring or failing to comply with the requirements of an Environmental Permit, including the risk of personal liability and sanctions, are clearly demonstrated by the above.
If you have received any form of environmental notice or warning from any authority, or you are concerned about your responsibilities and potential personal liability under Section 157 of the Environmental Protection Act, it is essential that you obtain immediate legal advice and support.
The team at KANGS has extensive experience advising clients on every aspect of environmental law and would be delighted to hear from you. If we can be of assistance, please do not hesitate to contact us using the details below:
Tel: 0333 370 4333
Email: info@kangssolicitors.co.uk
We provide initial no obligation discussion at our three offices in London, Birmingham, and Manchester. Alternatively, discussions can be held through video conferencing or telephone.
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