The Environment Agency’s regulatory appeals policy creates a significant gap in accountability where a statutory right of appeal exists.
This can be problematic in part because the regulated party is forced down a more complex and potentially more expensive statutory appeal route, but also because the purpose of a review mechanism is not confined to determining whether a regulatory decision should stand.
The Regulator’s Code recognises the importance of transparent, proportionate and accountable decision-making. Regulators are expected to provide an impartial route of appeal against both regulatory decisions and failures to act in accordance with the Code. The Government’s stated expectation is that regulated businesses should be able to challenge regulators where those standards are not being met.
Under the Agency’s published guidance, however, operators cannot access the Agency’s Stage 1 or Stage 2 review procedures where a statutory right of appeal exists.
At first sight, that may appear sensible as it may not seem clear why one would need two appeal processes dealing with the same issue.
In reality, the review processes are not necessarily dealing with the same issue and this can result in difficulties arising.
Take the service of an enforcement notice under Regulation 36 or a suspension notice under Regulation 37 of the Environmental Permitting (England and Wales) Regulations 2016. A statutory appeal is available and the Inspector will inevitably consider whether the notice should stand.
However, operators are frequently concerned with matters that extend beyond the validity of the notice itself. For example:
- Was the alleged non-compliance correctly assessed?
- Was the breach categorised appropriately?
- Was the compliance score justified and proportionate?
- Was all relevant evidence properly considered?
- Did the Agency follow its own compliance assessment guidance?
- Were the principles of the Regulators’ Code properly applied?
These issues can have significant regulatory and commercial consequences independently of the notice itself. Compliance assessment and scoring can affect a site’s compliance record, annual subsistence charges, regulatory relationship and future regulatory decision-making irrespective of the outcome of any statutory appeal.
The Agency’s own guidance on assessing and scoring permit compliance demonstrates that compliance scoring is an important regulatory process in its own right. Yet the Agency’s policy appears to prevent an operator from accessing Stage 1 or Stage 2 review simply because a statutory appeal exists in relation to the notice.
That gives rise to the first problem.
Scenario 1: The notice remains in force
The statutory appeal process is directed at the notice. It does not provide an obvious mechanism for obtaining an impartial review of every aspect of the compliance assessment and scoring process that may have led to the notice being issued or be a consequence of it. As a result, operators may be left without any effective route to challenge matters such as compliance scoring, notwithstanding the potentially significant consequences that flow from those assessments.
The second problem arises where the Agency subsequently withdraws the notice.
Scenario 2: The notice is withdrawn
Once the notice is withdrawn, the statutory appeal route may effectively disappear. Yet the operator may still have legitimate concerns about the process that led to the notice being issued, the compliance assessment that triggered it, the score that was awarded and whether the Agency acted consistently with its own published standards.
This raises two serious questions:
Does withdrawal of the notice then permit access to the Agency’s Stage 1 and Stage 2 review procedures or is the operator told that the opportunity has already passed because Stage 1 concerns should have been raised within 14 days of the original decision?
What if the prudent operator did submit a Stage 1 review within the 14-day period, only for the Agency to refuse to deal with it on the basis that a statutory appeal route existed?
The policy offers no satisfactory answer. An operator could find itself barred from the internal review process because a statutory appeal existed, only to discover later that the statutory appeal has fallen away because the notice has been withdrawn. Alternatively, the existence of a statutory appeal process could cause the Agency to reject legitimate appeals using the internal review process, forcing the operator to give up or go down the statutory appeal route, which might not be the most appropriate or expedient procedure.
The result is a potential procedural vacuum giving rise to injustice.
If that analysis is correct, a notice can be issued, challenged, withdrawn and yet the underlying decision-making process, including the compliance assessment and scoring that may have prompted the regulatory action, may never be subjected to an impartial internal review.
The prudent operator may therefore be well advised to submit a Stage 1 review request irrespective of the existence of a statutory appeal and the protestations of the Agency, both to preserve its position in relation to issues not addressed by the statutory appeal process and to reserve its position in the event that the notice is subsequently withdrawn.
That cannot easily be reconciled with the objectives of the Regulators’ Code, which seeks to promote transparency, accountability and effective challenge where businesses believe regulatory standards have not been met. Nor does it seem consistent with the Government’s stated expectation that regulators should provide meaningful routes by which their decisions and conduct can be challenged.
In my view, the policy is ripe for reconsideration.
Our specialist team can support you with compliance awareness so that you do not get caught out. Contact John Dyne today for help.