Southern Water – A cautionary but familiar tale

By Elf

The following article written by Emilio Graham, trainee solicitor member of ELF, sets out some thoughts on the recent Southern Water case and other water related cases

Record breakers

On 9 July 2021, Southern Water was fined a record £90 million at Canterbury Crown Court having pleaded guilty to 51 offences involving the release of between 16 and 21 billion litres of raw sewage into coastal waters. The illegal discharges occurred between 2010 and 2015 across 17 sites in Hampshire, Kent and West Sussex. The sentence greatly exceeded the previous record fine of £20 million received by Thames Water in 2017, also relating to illegal discharges. It would be fair to say that Southern Water was not a defendant of previous good character – the company having previously received 168 convictions and cautions for environmental offences.

The Environment Agency commenced their largest ever criminal investigation, Operation Garden, after shellfish were found to be contaminated with E.coli. The investigation uncovered that Southern Water had deliberately diverted raw sewage away from treatment works into the environment. Although water companies are permitted to divert untreated wastewater into the environment during periods of heavy rain, the Environment Agency found that, on thousands of occasions, discharges had occurred during periods of lower rainfall.

In his sentencing remarks, His Honour Mr Justice Jeremy Johnson said Southern Water “showed a shocking and wholesale disregard for the environment, for the precious and delicate ecosystems along the north Kent and Solent coastlines, to human health and to the fisheries and other legitimate businesses that depend on the vitality of the coastal waters”. He highlighted that the size of the fine was to act as a deterrent and remind other companies of “the need to comply with laws that are designed to protect the environment”.

Southern Water issued a statement following the sentence saying they were “deeply sorry” for the historic events that happened between 2010 and 2015. The company’s CEO, Ian McAulay, pointed out that he joined Southern Water in 2017 and that they have since changed the way they operate. Another investigation by the Environment Agency into Southern Water is under way covering pollution incidents after 2015, however, the Environment Agency is yet to bring any criminal charges.

This recent fine follows an earlier £126 million penalty imposed by Ofwat, the water industry regulator, on Southern Water in 2019 as a result of their regulatory failings over the same period of time.

Although the size of the fines received by privatised water companies has increased, there has not yet been a commensurate reduction of raw sewage discharges. It is hoped that Mr Justice Johnson’s clear message to the water and sewerage industry has the desired deterring effect.