The Court of Appeal has passed new sentencing guidelines for environmental offences made by very large organisations (VLOs), which will raise fines exponentially.
Under the new guidelines, if a VLO is found guilty of an environmental breach, it may be fined up to 100 per cent of its pre-tax profit for a given year. Based on the new sentencing guidelines, fines will be determined by:
- The culpability of the VLO
- The severity of harm caused
- The size of the VLO
Under these criteria, a VLO that has had no previous offences could receive a fine equal to that of a repeat offender. With potential fines of up to £100 million, this legislative change holds directors and shareholders of VLOs more financially accountable for their actions.
The aim of these fines is to illustrate to directors and shareholders the importance of compliance in their efforts, maintenance and responses to crises. Therefore, to minimise exposure to sizeable potential fines, VLOs will need to commit to implementing measures that address potential environmental crises in a prompt and thorough manner.
Industry experts predict that similar sea changes are on the horizon regarding financial penalties for regulatory and business non-compliance.
