The Environment Agency was also ordered to pay 60% of Suez’s costs, however the company’s bid to have two previously issued CARs revoked was turned down.
However, the outcome of the complaints process in relation to the CARs have been quashed and the two CARs have been remitted to the Agency for reconsideration (i.e. an appeal).
The ruling was handed down by Justice Fordham on Tuesday (28 November) following a two-day case at Leeds Administrative court between 15-17 October.
A CAR is used by Environment Agency officers when assessing compliance with environmental permits. The CAR form is used to record the findings of site inspections, audits and monitoring activities, and other data/reports.
This also includes a Compliance Classification Scheme score. This is recorded where non-compliance with a permit condition(s) has been identified. This can be used to calculate fees paid to the Agency.
While operators can challenge a CAR, Agency guidance says “the regulator makes the final decision on whether the CAR form is accurate and explain our reasons to the operator”. Suez argued there should be a clearer appeals process. The Agency reasoned its stance does comply with the relevant legislation.
The judgment creates an opportunity to develop a clear appeal process for addressing compliance assessments
- Mark Thompson, Suez
Ruling
Handing down judgement, Justice Fordham said: “Suez has shown a material error of law in the Agency’s consideration of the question of providing it a right of merits appeal. In light of my conclusion, the claim must succeed.”
He added earlier in his ruling: “Since the CAR decision-maker has, at that stage, made their decision, the necessary opportunity must be one involving a different decision-maker. That means there must be a post-CAR right to request merits re-evaluation; in other words, a merits appeal.”
Mark Thompson, chief legal officer for Suez recycling and recovery UK (full statement below) said: “Looking ahead, the judgment creates an opportunity to develop a clear appeal process for addressing compliance assessments where there is disagreement, promoting fairness and consistency.
“Together with our peers at the ESA [Environmental Services Association] we would welcome involvement to help create an appeal process that works for the Agency and operators alike, one that builds confidence for all in the regulatory regime and promotes high standards of environmental protection across the sector.”
A spokesperson for the Environment Agency said: “We are aware of the Court’s decision to allow the claim on the single count of how we interpret ‘regulatory decision’ for the purposes of our own internal guidance. We will now consider their decision carefully.”
Case
At the heart of the case were two CARs issued to Suez in July and August 2020 in regard to its the Byker Reclamation Plant, which turns household waste into RDF in Newcastle upon Tyne. Both CARS reported issues related to odour and meant Suez’s ‘subsistence payment’ rose from around £5,000 in 2020 to around £7,500 for 2021, documents show.
Suez argued that it was not able to challenge these fairly.
In 2020, Suez commenced a first claim for judicial review, challenging both CARs.
The Agency responded that Suez should first exhaust its alternative remedy by way of a complaint. Permission for judicial review was refused, on that basis, in November 2020.
This was then escalated to what is known as a Stage 2A independent internal review, the ruling explained. On 30 June 2021, the Internal Reviewer upheld the findings of non-compliance, Suez then commenced a second judicial review: the present claim.
Issues
With regards to the appeals process, the judgment explains that when the CARs were sought to be challenged on their merits by Suez, “no merits re-evaluation appeal was acknowledged by the Agency or supplied by it”.
He ruled that an adverse CAR is issued without any prior ‘minded to’ decision, such as would enable the regulated operator to make informed representations and supply evidence before the writer of the CAR arrives at their decision. “Unmitigated, that produces a procedural unfairness in the particular context of CARs with their adverse regulatory consequences and detriments,” the ruling says.
Suez however was not successful in its attempts to have the CARs revoked altogether.
On this matter, the judge said: “It is an open question whether Suez could ever have succeeded, or now succeed, on a merits re-evaluation.”
He later added: “I find it impossible to conclude that there was any breach of public law duties of procedural fairness or substantive reasonableness”.
Suez
Mark Thompson, chief legal officer for Suez recycling and recovery UK, said: “Protecting and enhancing the environment is core to SUEZ’s triple bottom line approach and is incorporated into our day to day operations through regular checks, reporting and proactive monitoring by our specialist in house team. We are proud of our strong track record and in 2022, 98% of our sites in England were assessed by the Agency as top performing sites.
“Our teams aim to work openly and collaboratively with the Agency, responding promptly to feedback on ways to improve compliance, and resolving areas of disagreement through dialogue where possible.
“Today’s judgment clarifies that the Environment Agency should consider a right of appeal for Compliance Assessment Reports (CARs).
“Looking ahead, the judgment creates an opportunity to develop a clear appeal process for addressing compliance assessments where there is disagreement, promoting fairness and consistency.
“Together with our peers at the ESA we would welcome involvement to help create an appeal process that works for the Agency and operators alike, one that builds confidence for all in the regulatory regime and promotes high standards of environmental protection across the sector.”
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