1st November 2023
“Removal of the cap on VMPs for environmental breaches is on the horizon. With such significantly extended powers in the regulators’ armoury, permit holders must focus more than ever on environmental compliance.“
Explore our video series Environmental Law in Practice, for practical guidance on managing your business’ impact on the environment.
The Environment Agency (EA) and Natural England are empowered to use civil sanctions including Variable Monetary Penalties (VMPs) as an alternative to criminal prosecutions for certain breaches of environmental law.
VMPs can be imposed directly by the regulators rather than by the courts. It’s their policy to use these powers:
Up to now, VMPs have been issued relatively infrequently and have tended to be modest. In the courts however, large fines are commonplace. Recent 2023 prosecutions include several fines, ranging from £510,000 to £3.3m, issued to various water companies.
On 5 August 2023, the EA confirmed that changes to regulators’ powers to issue VMPs are expected to come into force on 1 December 2023. Subject to consultation, the new regime will include removal of the £250,000 cap and an extension of powers to issue VMPs for breaches of the Environmental Permitting (England and Wales) Regulations 2016.
An overhaul of the VMP regime to cover breaches of environmental permits will mean that regulators will find it much easier to take enforcement action against a wide range of corporate offenders. VMPs are cheaper and quicker than prosecutions in the criminal courts and offer flexibility not always available under sentencing guidelines. They also require a lower evidential burden (although the regulator itself must still be satisfied ‘beyond reasonable doubt’ that an offence has been committed and there is a right of appeal to the First-tier tribunal). Although the changes are aimed primarily at tackling offending water companies , the new regime will affect all holders of environmental permits.
The removal of the VMP limit is likely to improve the capacity of regulators to take enforcement action against the biggest offenders. It’s also likely to expose smaller operators and permit holders to significant potential liabilities.
Enforcement action, including VMPs, can have significant financial, commercial and reputational consequences.
Walker Morris’ dedicated Environment team comprises multi-discipline specialist lawyers experienced in environmental law and enforcement, including all aspects of the environmental permitting regime.
We can work with businesses to create, implement and deliver effective strategies to avoid and remediate any water pollution or other environmental issues. With former regulators on the team, we pride ourselves on providing upfront, strategic advice and transactional assistance, to minimise the risk of environmental issues impacting development projects or business/site management generally.
Where allegations of environmental breaches do arise, we can support clients with sensitive and effective crisis management advice, as well as by negotiating with regulators to avoid or minimise penalties, convictions and commercial/reputational consequences.
 See Walker Morris’ recent briefings on Water stress: Environmental and commercial concerns and Water pollution and construction: What you need to know