Data Manipulation, Millions in Fines, and a New Corporate Offence: What Southern Water Tells Us

According to news reports the former CEO of Southern Water has been charged, alongside three other colleagues, for conspiracy to defraud the Environment Agency. It is alleged that between 2012 and 2017 the four conspired to manipulate reporting data which meant the water company escaped paying penalties in the region of £45 million.  This comes hot on the heels of the company being fined over £7 million for illegal sewage incidents earlier this month, and £90 million in 2021, with other criminal proceedings ongoing.  However, if these alleged offences had been committed post 1 September 2025 and the introduction of the failure to prevent fraud offence, or after 29 June 2026 and the introduction of the Section 250 of the Crime and Policing Act 2026 which allows a corporate to be prosecuted for offences committed by senior managers, Southern Water’s situation could have been even worse. This is because it may also have found itself prosecuted alongside the individuals for failing to prevent the alleged fraud and/or for the alleged fraud itself, if senior managers were found to have committed it whilst acting within the actual or apparent scope of their authority. Notably, Government Guidance published before the introduction of the failure to prevent fraud offence identified a scenario involving a company which had an environmental permit to make limited discharges into a river; but had in fact discharged more than it was allowed to.  In the scenario the head of the technical department falsified data provided to the Environment Agency in relation to the discharges to avoid the corporate being fined by the Regulator.  Whilst the allegations in the recently reported case concerns Southern Water, the case is also noteworthy from a corporate crime perspective as it highlights how wider regulatory compliance issues may overlap with fraud offences and be dealt with by the Regulator rather than the Police, CPS or SFO.