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Developer risk and the Office of Environmental Protection (OEP)

The creation of the Office for Environmental Protection (OEP) means that developers are at further risk of planning permissions and environmental permits being quashed by the courts. But what level of risk does the OEP really pose? Walker Morris’ Planning & Environment expert explains.

What is the OEP?

The OEP has been established by the UK government through the Environment Act 2021 to hold public authorities to account. The OEP has the power to investigate where a public authority has failed to comply with environmental law, and it considers that this failure would be a serious failure. The OEP’s work covers England and is currently awaiting approval from the Northern Ireland Assembly to extend its remit to devolved matters in Northern Ireland.

How does the complaints process work?

The OEP does not have to have received a complaint in order to investigate, however complaints can be submitted to the OEP where any internal procedures of decision-making public authority have been exhausted. Supporting evidence of the authority’s (i.e. a Local Planning Authority or the Environment Agency) failure to comply with a provision of environmental law will be required. The OEP will decide whether to investigate.

The OEP is required to notify the public authority of commencement of an investigation. However, there is no provision requiring the OEP to notify any third party developer that its consent may be subject to an investigation. It may therefore be down to the public authority to notify a developer. It is yet to be seen whether public authorities will do this.

If the OEP decides to investigate and finds that the public authority has not complied with environmental law, one of its options is to apply to the High Court for environmental review. This can result in the quashing of a planning permission, environmental permit or other consent (i.e. protected species licence).

Potential outcomes

The OEP may only take formal action through the courts if it is satisfied, on the balance of probabilities, that the authority has failed to comply with environmental law, and it considers the failure serious.

If the court finds that there has been a failure to comply with environmental law, it must issue a statement of non-compliance. However, this statement does not affect the ‘validity’ of any decision that the public authority has taken. This means that despite a statement of non-compliance, any consent issued by the public authority remains valid. It appears that the statement of non-compliance is similar to the declaration in judicial review proceedings – it is purely advisory.

However, once a statement of non-compliance has been made, the court may grant any remedy that could be granted on a judicial review, other than damages. The relevant consent could therefore be quashed as a result of the OEP’s investigation (see below).

The OEP has not published timescales in which it plans to deal with complaints, it has only published timings for complainants to submit a complaint. It is therefore unclear how this will work with the timescales applicable on an application for judicial review. Further procedural guidance is awaited.

Legal tests for quashing decisions

Although this may seem to be a wide ranging power, with potentially far reaching consequences, it is important to note that the court cannot quash any decision made by the public authority without first satisfying the conditions in s38(9) or s38(10) of the Environment Act 2021 (EA 21):

S38(9) EA 21 contains condition A, which requires that the court is satisfied that granting the remedy would not: (a) be likely to cause substantial hardship to, or substantially prejudice the rights of, any person other than the authority, or (b)  be detrimental to good administration.

S38(10) EA 21 contains condition B, which requires that condition A is not met, but the court is satisfied that: (a) granting the remedy is necessary in order to prevent or mitigate serious damage to the natural environment or to human health, and (b)  there is an exceptional public interest reason to grant it.

S38(11) EA 21 also requires that the court must apply the principles applicable on an application for judicial review. This imposes the ‘high bar’ which applies in all judicial review cases whether brought by the OEP or otherwise.

Consequences for developers

All of this indicates that developers are not at a huge additional risk of having planning permissions and environmental permits quashed by the courts.

Firstly, the OEP must decide to investigate. The OEP has expressed in its strategy that it has finite resources, and will only intervene in rare situations.

Secondly, if the OEP does investigate and finds that there has been a breach of environmental law, it must also decide that applying for an environmental review is the most appropriate enforcement action to take. The OEP has a wide range of enforcement functions set out in its draft enforcement policy, meaning that only in rare situations will it apply for environmental review.

Thirdly, if the OEP does decide that applying for environmental review is the most appropriate enforcement action to take, and the court has made a statement of non-compliance, the court must satisfy either condition A or B as detailed above, and apply the normal principles applicable on a judicial review, to decide to quash the decision of the local authority.

All in all, developers are likely to face a relatively low additional risk of having consents quashed by the courts following OEP investigation, albeit this does provide another avenue for third parties to challenge such decisions without placing themselves at risk of adverse costs awards. The development industry would be well advised to carefully monitor the progress of the OEP and, where at all possible, take as active a role as possible in any relevant court proceedings.