08 January 2024

In the recent judicial review case of R (Suez Recycling and Recovery UK Ltd) v Environment Agency [2023] the Administrative Court ruled that the Environment Agency (“EA”) failed to comply with the Regulators’ Code in not considering whether to provide a proper appeal mechanism for challenging Compliance Assessment Reports (“CARs”). This decision is important for anyone who holds an environmental permit, as an adverse CAR can have serious consequences.


Suez Recycling and Recovery UK Ltd (“Suez”) was the owner and operator of the Byker Reclamation Plant (the “Plant”) which benefitted from an environmental permit (the “Permit”) regulated by the Environment Agency (the “EA”). The permit was subject to a number of conditions, including the requirement that emissions released from the Plant were free from odour:

“at levels likely to cause annoyance outside the site, as perceived by an authorised officer of the Agency, unless the operator has used appropriate measures, including those specified in any odour management plan, to prevent or where that is not practicable to minimise the odour.”

In August 2020, the EA issued Suez with two negative CARs, citing breaches of the above condition as observed by their officers on 31 July and 7 August respectively. On both occasions the Officers found that the odour levels amounted to a Category 2 breach (significant impact or effect on the environment, people and/or property) under both the Compliance Classification Scheme (“CCS”) and Common Incidents Classification Scheme (“CICS”). 

Negative CAR decisions can have a detrimental impact on recipients: from reputational damage to real financial loss. CAR assessments are also linked to the amount of subsistence payment payable by an operator to the EA in respect of their regulated premises, and this case became a perfect example of the latter, as the fact that the assessments were carried out across two calendar months, meant that Suez was faced with an additional 50% uplift on their existing subsistence payment. 

Suez initially brought an action for judicial review in 2020, however this was refused on the basis that it was yet to exhaust its alternative remedies (i.e. the EA complaints procedure). The complaint was escalated to Stage 2A of the complaints procedure at which point the case was reviewed by an independent internal reviewer (the “Independent Reviewer”). The Independent Reviewer upheld the Officer’s decision on non-compliance; but did not re-examine the merits of the complaint. 

In 2023, Suez commenced a second judicial review. 


The Court considered the following issues:

1. Issue 1 - has the EA complied with its duties under the Regulatory Reform Act 2006 (the “2006 Act”) and the Regulators’ Code of Practice 2014 (the “2014 Code”) in considering the provision of a right of appeal against an adverse score on a CAR?

2. Issue 2 – was the EA required to provide a right of appeal against CAR decisions containing adverse compliance scores, as a matter of common law procedural fairness?

3. Issues 4 and 5 – were the CAR decisions lawful?

4. Issues 3 and 6 – was the Stage 2A decision (by the Independent Reviewer) procedurally fair, or was it vitiated by irrationality (unreasonableness)?

Issue 1

The first issue centred around the duty of Regulators to comply with their obligations under section 22 of the 2006 Act and, by extension, the 2014 Code. Section 22 requires that a body exercising “regulatory functions” complies with the relevant code of practice in force: in this case, the 2014 Code. Key sections of the 2014 Code provide that regulators must offer an “impartial and clearly explained route to appeal against a regulatory decision” (paragraph 2.3) and “a timely explanation in writing of any right to representation or right to appeal” (paragraph 2.4). 

The crux of this issue centred around the EA’s interpretation of a “regulatory decision” which, it claimed, required the imposition of a “mandatory obligation.” As such, the regulator suggested that the requirements of the 2014 Code would apply in respect of decisions to increase Suez’s subsistence payment, but not to the underlying CAR decision.

The Court could not support this interpretation and, in finding that it amounted to a “material error of law”, Mr Justice Fordham explained that he could find no textual or other evidence to support the narrowing of an otherwise broad scope. It was found that a “Regulatory Decision” was in fact just that: a decision taken by a regulatory body which was concrete, specific and adverse to the regulated person (in this case Suez). 

This does not however mean that a merits-based appeal should be offered in respect of every regulatory decision. The Court acknowledged the very real potential for such an expansive interpretation to become unworkable, and so highlighted that the obligation on regulators is merely to “have regard” to the 2014 Code. This, it was said, permitted regulators to derogate from these requirements in the event that they are outweighed by other relevant considerations (e.g. cost implications).

Suez succeeded on Issue 1.

Issue 2

On the second issue, Suez argued that, aside from the provisions of the 2014 Code, the EA was subject to a public law duty to provide an independent, merits-based appeal on all negative CAR decisions. It was argued that this was the minimum standard necessary to meet the public law requirement of procedural fairness. 

Whilst acknowledging that the requirements of procedural fairness were difficult to quantify, the Court was unable to support Suez’s interpretation that all negative CAR decisions would attract an appeals procedure. The duty of procedural fairness imposes a requirement on ministers and public bodies to act fairly in relation to the specific circumstances of the case: thus, there are no uniform requirements which can be applied across the board. It was held that the presence of procedural unfairness in making a CAR decision was a question of fact in each case and Fordham J. did not consider it necessary to impose an additional layer of procedural protection in respect of every adverse CAR decision. As such, the Court decided for the EA on this point.

Issues 4 and 5

On these issues, Suez’s argument, in essence, was that there had been a failure of legally sufficient enquiry and a failure to act in accordance with applicable guidance (i.e. the EA’s instruction documents), namely the failure of the EA officers to go onto the site (the Plant). It was argued that the officers’ failure to attend the site itself rendered their CAR scores unreliable, as shown by evidence provided by Suez in the course of the judicial review proceedings.

Again, the Court was unable to accept this argument. It was held that there was nothing on the evidence which required the Court to question the Officers’ findings as exaggerated, nor did its jurisdiction extend to a merits-based re-evaluation. Whilst it was acknowledged that EA guidance stressed the importance of attending the site itself, the Court noted that the officers were attending the site during the Covid-19 pandemic and had not received the necessary supervisor authorisation to enter the Plant at that time. 

Again, the Court found in favour of the EA. 

Issues 3 and 6

Having already dealt with the issue relating to whether Suez ought to have been afforded something different: a merits re-evaluation, by way of appeal (see Issue 1), the Court was not persuaded, when viewed as a supervisory review of a complaint, that there had been any procedural unfairness or breach of public law duties. It was noted that the decision of the Independent Reviewer was clear, thorough and gave reasons for its conclusions. Further, Suez had been given ample opportunity to put forward representations and evidence in support of their position. 

The Court found that there had been no procedural unfairness and that the decision had not been vitiated by unreasonableness. 


In remitting to the EA for further consideration, the true impact of this case remains to be seen. Whilst the regulator is bound to reconsider the facts of Suez, it will be interesting to see the impact of the judgment on future challenges. This could potentially play out in two ways: on the one hand, the EA may completely amend its complaints procedure (merits-based assessment and all), or it could seek a reasonable justification for a derogation from the 2014 Code.

Given the Court rejected Suez’s argument that the 2014 Code requires an appeal to an independent decision-maker and the EA was at pains to stress the expense and unworkability of full merits-appeals, it seems unlikely that in the future we will see appeals against CARs going to tribunals or adjudicators independent of the EA for determination. 

How can Burges Salmon help?

Although the specific circumstances of this case focused on a waste treatment centre, the eventual outcome of the EA’s consideration should rightly be on the radar of all regulated operators due to its potentially significant impact on the CAR regime. 

Our Environment team is highly experienced in regulatory challenges and disputes, so please do get in touch should you wish to discuss this case or its potential implications further.

Case summary written by Victoria Barnes and Eilidh Sheach.

Key contact

Michael Barlow

Michael Barlow Partner

  • Head of Environment
  • Head of Water
  • Head of ESG

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