Compliance Assessment Reports to be made public

The Environment Agency (EA) will start to publish Compliance Assessment Reports (commonly known as ‘CARs’) online from April 2025. The announcement appeared in an online update on 13 March, following the EA’s pledge to improve its regulatory transparency and consistency to help businesses they regulate, which formed part of the government’s recent regulatory Action Plan. This move is likely to place increased scrutiny on operators across all regulated sites as publication is rolled out. 

What are Compliance Assessment Reports?

The EA uses Compliance Assessment Reports to assess compliance with environmental permits. These reports document the results of site inspections, audits, monitoring activities, and reviews of various data and reports. 

A CAR records any non-compliance identified during an assessment and assigns a compliance score. This score impacts the site's compliance band and the subsistence fee for the following year. An adverse CAR can also highlight necessary corrective actions, affect the site's commercial reputation, trigger contract breaches, and contribute to a history of non-compliance, which the EA may consider when deciding on enforcement actions.

Publication of Compliance Assessment Reports

Although CARs are public register documents already, the EA will begin publishing CARs on GOV.UK. This brings the EA in line with other regulators such as Natural Resources Wales. The publication of CARs will happen in phases starting with CARs for water discharge activities which are written from 28 February 2025. This means that online publication will not be retrospective. 

The CARs will be published 42 days after they are issued to allow for the commercial confidentiality and appeal periods to have passed. CARs for water discharge activities written prior to 28 February 2025 will continue to be available to the public on request through freedom of information requests or requests for environmental information. 

What will be the impact of this change in approach?

The publication of CARs online means that these compliance records will be much more accessible to the public. This will certainly increase scrutiny on operators and the EA, and it could result in heightened risks for operators, such as reputational damage, neighbour complaints and potentially foster the threat of litigation.  At the same time and, given the enhanced level of scrutiny operators can expect, we anticipate that operators will be more willing to challenge adverse CARs and take advantage of the EA’s appeals process before any publication. Overall, these potential impacts are likely to take some time to materialise given the phased roll-out of publication.    

What to do if you receive an adverse Compliance Assessment Report?

If an operator receives an adverse CAR it has the opportunity to challenge the decisions recorded on the CAR through the EA’s revamped appeals process. 

In August last year, we reported on the Environment Agency’s proposed changes to its regulatory appeals process. The proposals followed the EA’s commitment to undertake a review of its regulatory complaints and appeals procedure following the High Court decision of R (Suez Recycling and Recovery UK Ltd) v Environment Agency [2023] (the “Suez case”). In that case, the High Court determined that the EA had made a material error of law by failing to comply with the Regulators’ Code of Practice 2014 in not considering whether to provide a proper appeal mechanism for challenging CARs. 

The EA’s updated two-stage appeals process was implemented in December 2024 and is as follows:

1. Stage 1: Pre-regulatory appeal decision: within 14 calendar days of being notified of a regulatory decision or if the regulatory decision is communicated directly in writing, within 14 days of receipt of that communication, the regulated entity should contact (either in writing or verbally) the individual within the EA who made the decision or took the action. The EA should respond to concerns raised within 14 calendar days. If that is not possible, the EA will write to give a timeframe for their response. If the issue remains unresolved, the written response from the EA will prescribe the next steps for a regulatory appeal;
2. Stage 2: Regulatory appeal: the dissatisfied regulated entity will have 28 calendar days from the date of the Stage 1 review to request a regulatory appeal. The EA will look at the appeal to make sure that: it is about a regulatory decision or a failure to comply with the Regulators’ Code, a statutory right of appeal is not available, there has been a stage 1 discussion and the appeal has been submitted within the required time. If they reject the appeal at this point, the Environment Agency will write to explain why.  After the initial review, an EA employee who was impartial to the original decision will review the appeal. They will be provided with a document that will include all relevant information. The regulated entity appealing will also be provided with a copy of this document. The impartial person may ask for more information from the regulated entity or the original decision maker during the appeal. They will consider the information submitted and may, where they consider it appropriate, take account of new information and considerations since the original decision was made. The impartial person may agree with (uphold) the original decision or change it. If they change the decision, they will explain what will happen next. The EA should write with the outcome within 28 calendar days of the regulatory appeal, although in our experience it can take longer. 

The revised regulatory appeals process is intended to address the imbalance identified in the Suez case as regards a regulated entity’s right to appeal a CAR decision. However, whilst the new procedure does offer an alternative channel for an aggrieved entity to seek an impartial reconsideration where it disagrees with the EA’s decisions, the changes leave open a number of questions as to the fairness of the process. In addition, in our experience to date in supporting clients through the new process, the EA has not always implemented the new appeals process in line with the new guidance.

The Burges Salmon team has extensive experience advising on regulatory disputes and supporting clients through regulatory appeals. If you need advice on the new approach to the publication of CARs, and what this means for you or your business, or support in challenging a regulatory decision, please contact Michael Barlow at [email protected] or Victoria Barnes at [email protected].