In a significant judgment for environmental regulation and criminal enforcement, the Divisional Court has confirmed that the Environment Agency (EA) has the power to prosecute common law offences, including conspiracy to defraud, where doing so is connected to the discharge of its statutory functions. The case arose from the EA’s prosecution of Matthew Wright, former CEO of Southern Water, and other senior figures over an alleged scheme to manipulate wastewater monitoring processes and conceal environmental non-compliance.
The allegations centred on the deliberate creation of “no-flow” conditions at wastewater treatment sites to avoid adverse sampling results under the Operator Self-Monitoring regime. According to the EA, the scheme enabled Southern Water to conceal pollution incidents and avoid regulatory penalties potentially worth tens of millions of pounds.
The legal challenge did not concern the merits of the allegations. Instead, Wright argued that the EA lacked authority to prosecute the common law offence of conspiracy to defraud. He contended that Section 37 of the Environment Act 1995 (“Section 37”) only permits the EA to prosecute statutory environmental offences and not wider fraud, dishonesty or conspiracy offences.
The Divisional Court decisively rejected that argument. Lord Justice Popplewell held that the EA is a statutory body whose prosecutorial powers derive from Section 37. While Section 37 does not grant an unlimited right to prosecute any offence, it authorises prosecutions for any criminal offence where the prosecution is calculated to facilitate, is conducive to, or is incidental to the Agency’s statutory functions.
The court emphasised several key considerations:
- The EA’s functions extend far beyond enforcing specific environmental offences and include broader duties relating to environmental protection, pollution prevention and regulatory oversight.
- The wording of Section 37 contains no restriction limiting prosecutions to statutory environmental offences.
- It would produce illogical results if the EA could prosecute permit breaches but not related offences such as conspiracy, fraud, criminal damage or other criminal conduct directly undermining environmental regulation.
- Prosecuting serious fraud designed to manipulate environmental monitoring systems is plainly conducive to the EA’s core function of preventing pollution and maintaining regulatory integrity.
Importantly, the court confirmed that the EA’s power is offence-neutral. The critical question is not the nature of the offence charged but whether the prosecution furthers the Agency’s statutory responsibilities.
The decision strengthens the EA’s enforcement toolkit and signals judicial recognition that sophisticated environmental wrongdoing may require prosecutors to rely on broader criminal offences, including fraud and conspiracy, where those charges better reflect the gravity and complexity of the conduct alleged.
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