Appealing Compliance Assessment Reports
17th Oct 2025
Introduction
A Compliance Assessment Report (CAR) is the Environment Agency’s formal record of site compliance. Though technical in nature, an adverse CAR can result in higher charges, increased scrutiny, reputational harm, and, by forming part of the operator’s compliance history, may underpin future enforcement action. Media and watchdogs increasingly cite the findings in CARs as evidence of environmental harm, amplifying public attention. It is crucial that operators, regulators and stakeholders understand the principles behind CARs, how non-compliance is categorised and the options for challenge or appeal.
Measuring Environmental Harm
The essential purpose of a CAR is to assess whether there has been a breach of an environmental permit condition and to consider what harm that breach has caused. Ultimately, this comes down to a single question: what is the reasonably foreseeable impact of non-compliance with a permit condition? This harm is categorised under the Environment Agency’s Compliance Classification Scheme (“CCS”), as follows:
a. Category 1 – a non-compliance associated with a major impact on human health, quality of life or the environment. (60 Points)
b. Category 2 – a non-compliance associated with a significant impact on human health, quality of life or the environment. (31 Points)
c. Category 3 – a non-compliance associated with a minor impact on human health, quality of life or the environment. (4 Points)
d. Category 4 – a non-compliance associated with no potential environmental impact. The EA describe a CCS 3 breach as a minor breach, and CCS 4 is often used for administrative errors. (0.1 Points)
Although the CCS looks numerical, the category decision is evaluative. Inspectors must assess the reasonably foreseeable impact if the non-compliance were not promptly addressed. With the exception of non-compliances relating to odour, dust, noise and pests, environmental harm is not considered in terms of actual impact but rather what would be reasonably foreseeable impact.
It is worth noting that the CCS points scale is non-linear. A Category 2 ‘significant’ breach carries almost eight times the points of a Category 3 ‘minor’ breach.
CARs, scoring and consequences
The Environment Agency’s Guidance on Assessing and Scoring Environmental Permit Compliance sets out six Compliance Classification Scheme (“CCS”) principles. These principles are fundamental: they dictate what goes on the CAR, how it is scored, and ultimately what might need to be paid. They are also the standards against which an inspector’s decision, and any Stage 1/Stage 2 appeal, will be judged. A CAR recorded without applying these principles (or without reasons showing they were applied) is vulnerable to challenge and can lead to incorrect bands and inflated subsistence charges. There are six principles (“the CCS principles”):
a. CCS Principle 1: record all non-compliances
b. CCS Principle 2: consolidation
c. CCS Principle 3: assess the reasonably foreseeable impact
d. CCS Principle 4: assess the root cause of the original non-compliance
e. CCS Principle 5: suspend scores
f. CCS Principle 6: assess the category of non-compliance
While the EA website provides detailed guidance on each principle, practical application often reveals complexities that are not immediately apparent. Since these principles underpin both inspection and appeal processes, operators and regulators must have a clear understanding of the implications of each principle.
Principle 1 is that all instances of non-compliance should be recorded. The first question is therefore whether there has actually been a breach of a permit condition. In considering this, both operators and regulators should closely read the permit conditions and any numerical limits or reporting requirements. At this stage, it is important to verify any monitoring data or calculations that led to the non-compliance report and check whether an emission truly exceeded the permitted level, considering averaging periods or margins of error defined in the permit.
Principle 2 addresses consolidation. The Environment Agency must give one category and one score per permit condition. If the inspector recorded multiple breaches under the same condition or sub-condition, then these should be collapsed. For example, if a pump failure caused three separate minor discharges, they all fall under one permit clause – only the worst discharge (highest category) should count. In essence, the principle is that a single breach should only be punished once rather than recorded in a series of separate breaches.
Under Principle 3, an inspector must assess the reasonably foreseeable impact if a breach were not addressed promptly and adequately. To some degree, this is always going to involve an evaluative judgment by an inspector. However, this should always be supported by evidence. For instance, the inspector must judge its risk category by considering the source-pathway-receptor linkage. Practical metrics to consider would be:
a. The source-pathway-receptor relationship. What is the pathway from the breach to sensitive receptors (i.e. people, watercourses, designated sites)?
b. Is there any other relevant data relating to the breach? Where a primary monitor has failed, look to a surrogate parameter (e.g. in a case of TOC monitoring failing, looking at CO levels)
c. Mitigations operating at the time: secondary containment, alarm responses, and any standing procedures that reduced consequence. These would limit any potential impact.
An effective CAR would explain the pathway to receptors, the duration and magnitude and a clear statement of why the category selected is appreciated. While the decision is ultimately an evaluative one by an inspector, it still needs to be evidenced and justified. For example, if an emission can only reach a river via a blocked drain, the ‘pathway’ is broken – which would undercut a high impact rating. Likewise, note all mitigations (bund walls, alarms, shutdown procedures, etc.) that would limit harm.
Under Principle 4, the EA must separately score any management-system breach, but not double-count the same facts. If the CAR creates two entries of non-compliance (i.e. for the primary breach and the other for management), then these should have distinct narratives: the management NC should explain why the system failed (e.g. lack of training or no contingency plan) whereas the factual NC describes what happened (e.g. “tank overfilled”). The CAR should identify separate rationale and wording for the two rather than just penalise the same failure twice.
Under Principle 5, operators with credible corrective action plans should ask to suspend rather than confirm the score. Under EA rules, suspension is allowed if the site is actively fixing the problem (through an enforcement or voluntary plan). Suspension is typically limited (e.g. up to 6 months) and conditional on the timely completion of actions. If the site fails to implement the fix, suspended scores are reinstated. Operators should thus articulate any ongoing corrective plan in their Stage 1 reply if they want suspension, not confirmation of the breach.
Principle 6 is the conversion step: having assessed impact under Principle 3, the inspector must assign a single category (C1 – C4) that reflects the severity of that impact (reasonably foreseeable for most conditions; actual impact for amenity issues such as odour, dust, noise and pests). The category must be reasoned on the CAR and aligned with consolidation under Principle 2 (i.e. one category/score per permit condition per assessment, ordinarily the highest applicable). At the end of the compliance year, the scores for non-compliance are added together to generate a compliance band.
a. Band A = 0 points
b. Band B = 0.1 – 10 points
c. Band C = 10.1 – 30 points
d. Band D = 30.1 – 60 points
e. Band E = 60.1 – 149.9 points
f. Band F > 150 points
Each band would then affect the subsistence charge that is charged to the site.
Regulators Code
The Environment Agency must have regard to the Regulators’ Code when making and reviewing regulatory decisions. In practice, this translates into demonstrable clarity, proportionality and fair challenge.
A CAR or reply must ‘clearly explain what the non-compliance is, the advice being given, actions required and the reasons for these.’ (Regulators Code Section 2.2) Missing details (e.g. which period, which limit, why it matters) can be flagged under Section 2.2, including questions like whether the CAR text identifies the exact permit sub-condition and its function or whether the EA explain how the emissions/consequence relates to harm or receptors, following Principle 3.
The Code expects regulators to consider all relevant and available evidence, including external/independent verification where it exists (Section 3.4). For CARs, this means engaging with lab certificates (e.g. for sample analysis), equipment calibration certificates, and recent third-party audit findings.
The Code requires proportionate action and avoidance of unnecessary burdens. Practically, this means considering if a lower category or temporary fix could yield essentially the same outcome. The EA should justify why the selected category and remedy are the least burdensome way to achieve the desired environmental outcome. For example, if downgrading a breach from Category 2 to Category 3 would not materially change environmental protection, insisting on a Category 2 with much higher costs may be seen as disproportionate.
In summary, a well-founded CAR (and any appeal response) will systematically apply the EA’s six compliance principles and explicitly check the Regulators’ Code. That means thoroughly verifying the breach, clearly explaining, and evidencing its impact and category, and ensuring the process respects the Code’s clarity, appeal and proportionality requirements.
Legal Framework
Possible routes of challenge
The key case on the status of CARs is the judgment of Mr Justice Fordham in R (on the application of Suez Recycling and Recovery UK Ltd) v Environment Agency [2023] EWHC 3012 (Admin). Mr Justice Fordham held at [39] that an adverse CAR is a ‘regulatory decision’. This means there are three stages of appeal: complaint, appeal and judicial review.
Stage 1, the complaint, is effectively the internal review procedure of the EA for regulatory decisions. The EA describes this as follows: ‘Stage 1 is an opportunity for quick corrections to be made and to resolve misunderstandings.’ The complaint needs to be made within 14 calendar days of the receipt of the CAR. In practice, this means sending a written notice detailing the issues with the CAR to the Environment Agency.
The complaint is an opportunity to ‘Raise your concerns with the officer or team which made the regulatory decision or took the action you think did not follow the Regulators’ Code.’ It would be a supervisory review and would not involve a merits re-evaluation of the decision (Suez at [23]).
The operator has 28 days from the receipt of the outcome of the complaint to escalate to a Stage 2 appeal. According to the EA guidance, the Stage 2 Appeal should identify ‘why you believe the regulatory decision is wrong or how the action failed to meet the Regulators’ Code’.
A Stage 2 appeal has two elements. Part 1 is procedural (is the appeal about a regulatory decision, is a statutory right of appeal not available, has a Stage 1 Appeal happened, is it within time). Assuming it passes these jurisdictional gateways, Part 2 involves an independent EA employee not involved in the original decision, as far as possible, standing in the shoes of the decision maker. It ‘does involve a merits re-evaluation retaking the impugned decision afresh’ (Suez at [23]).
The final stage is a judicial review of the decision. Given that judicial review would require exhausting alternative avenues of review, it would likely be necessary to follow the complaint and appeal stages as a precursor to a successful judicial review. The grounds would generally be that the decision was unlawful (for instance, an irrational assessment of risk, or a failure to follow required procedures or the Code). Courts are cautious not to interfere with technical judgments, but Suez shows they will intervene if the regulator is found to have misinterpreted its legal duties (in that case, the duty to consider an appeal route).
The Ombudsman
There is also the option of making a complaint to the Ombudsman. The Parliamentary and Health Service Ombudsman (PHSO) is an independent body that investigates complaints of maladministration by UK government departments and agencies, including the Environment Agency. Crucially, the Ombudsman is not a court and cannot directly overturn administrative decisions, but it can investigate the way decisions were made and recommend remedies. For instance, if a CAR says a permit condition has been breached, the Ombudsman will not second-guess the technical judgment of the officer if it was reached through a proper process.
The EA’s guidance is that the Ombudsman will ‘only consider complaints after the Environment Agency has had the chance to resolve them’. The complaint to PHSO must typically be submitted via a Member of Parliament within 12 months of the complainant becoming aware of the problem. In the context of a CAR, this usually means within 12 months of the final EA decision on it.
Further, PHSO recommendations are not legally binding – the Ombudsman cannot force the EA to comply as a court order would. If an agency refuses, the Ombudsman’s ultimate recourse is to issue a special report to Parliament drawing attention to the failure to remedy the injustice. Under Section 10(3) of the 1967 Act, the Ombudsman can lay a report before Parliament if the injustice has not been remedied. This is a serious step and relatively rare. In April 2022, PHSO Rob Behrens took the extraordinary step of referring an EA case to Parliament, the first in 8 years, because the Environment Agency had not fully implemented his recommendations in a dispute over a hydropower licence delay. In practice, this is an unlikely outcome.
Conclusion
Inevitably, the timelines related to appeals mean that operators in receipt of an adverse CAR need to act quickly. Given the limits of the power of the Court and the Ombudsman, the real opportunity for reversal lies in persuading the regulator who issued the CAR. This requires a focused, evidence-based approach that highlights overlooked facts or misjudgements. Ultimately, it is a matter of convincing an evaluative decision-maker that the categorisation or its consequences are flawed. The EA must substantiate both; the operator must rigorously test them using data, context, and mitigation.
Article written by Jamie Arthur.
