UK: Can Voluntary Compensation Reduce Criminal Fines?

Last Updated: 13 December 2010
Article by Aidan Thomson

The Court of Appeal has recently looked at principles of sentencing for environmental crimes in circumstances where the defendant has already made significant pledges of compensation.

This case of R v Thames Water Utilities Ltd (19 February 2010) centred on a discharge of bleach from Thames Water's plant into a tributary of the River Wandle, in contravention of section 85(1) of the Water Resources Act 1991.

The discharge occurred in the course of a tank cleaning operation at the plant. Thames Water had failed to carry out an adequate risk assessment. Inexperienced and insufficient staff undertook the cleaning operation and inadequate precautions were taken to guard against the possibility of discharge.

There was a short, but important, delay by Thames Water in notifying the Environment Agency of the incident. When the bleach entered the tributary, over two tonnes of fish were killed. Substantial quantities of the fish were of very high quality. The vast majority of the water hog lice, fresh water shrimp and other invertebrates in the affected area also perished. The public had to be kept away from the affected stretches of the river for their own protection.

In the aftermath of the incident, Thames Water pledged the following sums:

  • £7,000 project funding for a local education project;
  • £10,000 in compensation for the two local angling clubs;
  • £30,000 to meet the costs of restocking and an ongoing survey to assess damage to the river's ecology;
  • £200,000 core funding for the Wandle Trust to include support for the cost of an employee who will raise additional project funding to deliver access and habitat improvements along the length of the river; and
  • £250,000 to be paid over five years for a restoration fund to support local projects and improve the river environment.

In passing sentence in the Crown Court, the Recorder noted as aggravating factors: the disastrous consequences of the incident; the lack of risk assessment, the poor initial response and the number of previous offences committed by the defendant. These factors suggested £250,000 as the appropriate level of fine. However, mitigating factors (including Thames Water's acceptance of responsibility; its timely plea of guilty; its introduction of new systems; and its decision to pay and pledge a total of £500,000 in voluntary compensation) were also important. When taken into account, the overall result was a fine of £125,000.

Thames Water appealed against this decision on the basis that:

  • insufficient account was taken of the £500,000 paid in reparation;
  • the level of fine taken as a starting point (£250,000) was too high: and
  • too much weight was given to its previous convictions.

The Court of Appeal reviewed the sentencing principles that emerged from a variety of sources, including: sections 142(1), 143(1) and 143(2) of the Criminal Justice Act 2003; the "Sentencing Advisory Panel Advice to the Court of Appeal in March 2000 in connection with environmental offences"; the "Sentencing Guidelines Council Definitive Guideline on Overarching Principles: Seriousness" published in December 2004, Environment Agency v Milford Haven Port Authority (The Sea Empress); R. v Anglian Water Services Ltd; R. v Balfour Beatty Rail Infrastructure Services Ltd; and R. v Kelleher.

The Court of Appeal acknowledged the Recorder's difficult task. It set out a series of principles to assist courts in setting the appropriate sentence for offenders of this type.

  • The court should assess the seriousness of the offence by reference to its facts, including all aggravating and mitigating factors relating to the offence itself.
  • Having made this assessment, and considered the means of the offender, a notional fine should be set. This notional fine should combine both the punishment and deterrent elements of the sentence. The deterrent element should be the amount over and above the amount of the punishment element that is required to reach a total figure that brings the "necessary message home" to the offender's managers and shareholders.
  • The court should then consider making any appropriate compensation orders. If such an order is made, the court should think about whether the notional fine ought to be reduced.
  • Next, the court should take heed of the extent to which, if at all, the offender has "brought the message home to itself", over and above taking measures to rectify the failures that led to the offence. Account can be taken of things such as the voluntary payment of reparations, and appropriate adjustments to the deterrent element of the notional fine made.
  • The court should then consider any further mitigating features (other than any relating to the offence itself which have already been taken into account above) requiring any further reduction in the amount of the notional fine.
  • Finally, the court should make the appropriate percentage discount for any timely guilty plea.

Applying this approach to the case in hand, the Court of Appeal:

  • could not fault the Recorder's notional starting point of £250,000 (split £75,000 punishment, £175,000 deterrent);
  • felt that it was not possible in the circumstances to make a compensation order;
  • thought that because of the high level of voluntary reparations, Thames Water had succeeded in bringing the message home to itself to such an extent that the deterrent element of the fine should be reduced to nil;
  • felt that there were no mitigating features; and
  • allowed for the full one third discount to the £75,000 punishment element for the timely guilty plea.

The Court of Appeal therefore decided that Thames Water's fine should be reduced to £50,000.

Sentencing procedure will therefore take account of pledges of reparation. However, the Court of Appeal did sound two notes of warning, saying that:

  • In deciding on appropriate punishment and deterrence, it must be recognised that in making voluntary reparation an offender is likely to make a public relations gain, and may also be able to spread payments out to a much greater extent than would be the case if a fine and compensation order was imposed. There can be no question of buying off the punishment aspect of sentence.
  • As a result of following this approach in the future there may well be occasions when, on the face of the court record, a relatively modest sentence is imposed on a defendant for what was, in fact, an offence that would normally attract a much higher sentence. There is a risk that a court dealing with a subsequent offence by the same defendant is misled as to the seriousness of the previous offence simply because of the relatively modest size of the penalty. Investigators and prosecutors therefore need to ensure that the full facts of previous offences are set out.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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