Klima-Therm Limited v The Environment Agency
[2023] UKFTT 1080 (GRC)
Buy It Direct Ltd v Environment Agency
5 September 2023
[2023] UKFTT 808 (GRC)
First-tier Tribunal
An online retailer was fined for not properly proving that customers using their air conditioning units used qualified installers. The judge agreed the retailer hadn't done enough to prove this, but reduced the fine from £42,000 to £37,500 because the retailer cooperated and tried to improve things after the problem was pointed out.
Key Facts
- •Buy It Direct Ltd (BID) appealed a £42,000 penalty under the Fluorinated Greenhouse Gases Regulations 2015 for failing to obtain evidence that air conditioning units were installed by certified engineers.
- •BID, an online retailer, relied on customers' contractual agreement to use qualified installers as evidence of compliance.
- •The Environment Agency (EA) argued that BID's system did not meet the evidence requirement, citing a low percentage of confirmed installations by certified engineers.
- •The Tribunal considered EA guidance issued in 2014, 2018, and a consultant's report (Gluckman guidance) defining the required evidence.
- •BID's online sales process was deemed insufficient to ensure compliance, lacking the necessary commitment and understanding from customers compared to the guidance provided by EA.
Legal Principles
Relevant enforcing authority may impose a civil penalty for non-compliance with the Fluorinated Greenhouse Gases Regulations 2015.
Fluorinated Greenhouse Gases Regulations 2015, regulation 31A
Restrictions on placing on the market products and equipment listed in Annex III of EU Regulation No 517/2014, including evidence requirement for non-hermetically sealed equipment.
EU Regulation No 517/2014, Article 11
EA Enforcement and Sanctions Policy considers factors like the nature of the breach, culpability, size of the organisation, financial gain, history of non-compliance, and attitude of the non-compliant person when determining penalties.
Environment Agency's Enforcement and Sanctions Policy Annex 2
Case law from R v Sellafield and R v Network Rail relevant to determining appropriate penalties for environmental breaches, especially concerning systemic failures in large organisations.
R v Sellafield, R v Network Rail [2014] EWCA Crim 49
Outcomes
Appeal allowed in part.
The Tribunal found that BID's system for obtaining evidence of compliance was inadequate, but also considered mitigating factors like co-operation and financial circumstances.
Penalty reduced to £37,500.
Reduction based on mitigating factors and consideration of EA guidance, case law, and BID's subsequent efforts to improve compliance.