Data obtained directly from the Environment Agency (EA) show that the average fine against a company in 2017/18 was £147,575. This compares to just £23,731 in 2013/14.
Clyde & Co explains that, while the number of prosecutions against companies has reduced to almost a quarter of where it stood five years ago (from 114 in 2013/14 to 32 in 2017/18), the average value of a fine has significantly increased.
Sentencing guidance introduced on the 1 July 2014 toughened penalties for most environmental offences. Under the new approach, the scale of fines varies but can exceed £20m for the very worst cases involving the largest companies.
Rod Hunt, partner at Clyde & Co, comments: "The environmental sentencing guideline has now been in force for almost four years and is biting hard."
"However, we believe the increase in average fine level is not only attributable to the sentencing guidelines but also the fact the EA is effectively deploying its full armoury of enforcement sanctions, and is more readily using enforcement undertakings for less serious offences while typically reserving prosecution for the worst offences and worst offenders.
"This has resulted in a decrease in the number of prosecutions but an increase in the average fine level.
"In 2016/17 we had the big ticket, multi-million pound (£20.3m) fine against Thames Water that really made its mark. The message to businesses is that the EA will continue to prosecute the more serious offences and offenders so ensure you are complying with your environmental obligations or risk potentially eye watering fines in the criminal courts."
Directors remain a target for the EA
Clyde & Co points out that there were 22 prosecutions against company directors in 2017/18, compared with 25 in the previous year.
Dr Anna Willetts, senior associate at Clyde & Co, comments: "The data show that directors are clearly still at risk of prosecution. The number of director prosecutions remains very similar to last year and we expect the EA to continue to target those at the top for compliance failures.
"The EA is using everything in its arsenal to crack down on non-compliance. The significant increase in average company fines coupled with the continued targeting of company directors means complying with environmental regulation is, more than ever, a top priority for the boardroom."