High Court confirms Environment Agency's power to prosecute Southern Water executive for conspiracy to defraud

The High Court has dismissed a challenge to the Environment Agency's authority to prosecute a former Southern Water chief executive for conspiracy to defraud at common law, and has set aside an anonymity order that had prevented publication of his identity.

In R (Wright) v Medway Magistrates' Court [2026] EWHC 1842 (Admin), the Divisional Court, comprising Lord Justice Popplewell and Mr Justice Hilliard, considered a judicial review application brought by Matthew Wright, formerly Chief Executive Officer of Southern Water Services Ltd, following the issue of a summons charging him and three other individuals with conspiracy to defraud. The Environment Agency alleged a deliberate scheme to manipulate operator self-monitoring testing at wastewater treatment works, including arranging for tankers to remove wastewater to engineer "no-flow" results, thereby concealing non-compliance from the regulator and Ofwat and avoiding penalties the Agency assessed at over £45 million.

The central legal question concerned the scope of section 37(1) of the Environment Act 1995, which empowers the Agency to do anything calculated to facilitate, or conducive or incidental to, the carrying out of its functions, and separately provides that the Agency "may institute criminal proceedings in England and Wales". Wright argued this power was confined to statutory environmental offences and did not extend to common law offences such as conspiracy to defraud. The Environment Agency argued, in the alternative, that the power extended to any offence which, in its opinion, was incidental to its functions.

Lord Justice Popplewell rejected the Agency's primary submission that the provision conferred an unlimited power to prosecute any offence, finding the "hanging phrase" in section 37(1) had to be read conjunctively with the earlier wording, consistent with the section's heading of "incidental general functions" and its legislative origins in the Water Resources Act 1991. However, he accepted the Agency's alternative case: the power extends to prosecuting any offence, of any nature, provided that in the Agency's opinion doing so is calculated to facilitate, or is conducive or incidental to, its functions. Wright's narrower construction, confining the power to statutory environmental offences and excluding inchoate offences such as conspiracy, was described as producing anomalous results and as internally incoherent, given that several statutory environmental offences themselves involve dishonesty. Applying that construction, prosecuting the alleged conspiracy was plainly incidental to the Agency's functions in preventing pollution and deterring similar conduct, and permission for judicial review was refused.

The judgement also addressed an anonymity order granted to Wright by Mansfield J pending determination of the judicial review. Drawing on ZXC v Bloomberg LP and related authorities, the court held that once a person has been charged, the general rule is that there is no reasonable expectation of privacy, and found nothing in Wright's evidence to displace that position, noting his high-profile role at a major public utility already subject to significant press scrutiny, including in connection with a separate prosecution of the company itself. The court further found that Wright had breached his duty of candour by failing to inform the court that the urgency underlying the anonymity application had fallen away, though it noted a corresponding, lesser failure by the Agency to promptly update the court. The anonymity order was set aside, permitting full reporting of the proceedings including Wright's identity.