Thames Water has failed in its appeal to get a £250,000 fine for environmental offences reduced.

Thames Water Utilities was fined £250,000 in September 2014 for polluting a nature reserve in Newbury after a pump failure at a sewage pumping station. The company lodged a challenge but the Court of Appeal has now upheld the fine.

Despite repeated alarms in Thames Water’s control centre showing a total pump failure at a sewage pumping station it was five days until the company attended the site. The pollution was brought to the attention of the Environment Agency and Thames Water by a member of the public. For five days raw sewage flowed into a rare woodland.

The Court of Appeal said the fine was proportionate, considering the profits made by the company.

“To bring the message home to the directors and shareholders of organisations which have offended negligently more than once before, a substantial increase in the level of fines, sufficient to have a material impact on the finances of the company as a whole, will ordinarily be appropriate,” the Court of Appeal said. “This may therefore result in fines measured in millions of pounds.”

Environment Agency deputy director Anne Brosnan said: “Under the new environmental sentencing guideline very large companies who risk causing serious environmental damage could now face very large fines.

“In this instance the company did not act swiftly enough to stop sewage damaging the nature reserve and a significant clean-up operation was needed. This sentence should act as a deterrent. In fact, the court said that it would have upheld a very substantially higher fine in this case.”

This is the first judgement of the Court of Appeal to consider the new 2014 Sentencing Council Guideline for Environmental Offences and it confirms the intention that fines will be fixed taking into account the means of the offender, not just to reduce the level of a fine in a particular case, but to increase it for big companies.

In discussing the new environmental sentencing guideline the Court of Appeal noted that in the worst cases, which cause the highest category of harm and culpability: “The objectives of punishment, deterrence and the removal of gain (for example the decision of management not to expend sufficient resources in modernisation and improvement) must be achieved by the level of penalty imposed. This may well result in a fine equal to a substantial percentage, up to 100% of the company’s pre-tax net profit for the year in question… even if this results in fines in excess of £100m.”