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Home News Accused of Defrauding the Regulator – Court Clears Way for Prosecution of Southern Water Bosses Over “Carefully Planned Fraud”
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Accused of Defrauding the Regulator – Court Clears Way for Prosecution of Southern Water Bosses Over “Carefully Planned Fraud”

23/07/2026

A UK High Court ruling on 22 July 2026 has greenlit the Environment Agency’s (EA) attempt to prosecute four former Southern Water executives, including the company’s former chief executive, for allegedly conspiring to defraud the regulator.

The Administrative Court (Lord Justice Popplewell and Mr Justice Hilliard) dismissed a judicial review challenge brought by Matthew Wright, Southern Water’s former CEO.

Wright had argued that the EA lacked the legal power to prosecute him for the common-law offense of conspiracy to defraud. The judges ruled that section 37 of the Environment Act 1995 gives the Agency the authority to bring such proceedings where they are calculated to facilitate, or are conducive or incidental to, its functions.

The allegations

  • The EA alleges that between 1 January 2012 and 31 December 2017, Wright, together with Philip Barker, Clive Massey and Mark Gregory (all former Southern Water employees), conspired to defraud the Environment Agency and the economic regulator Ofwat.
  • The method claimed is the deliberate creation of “artificial no-flow events” at wastewater treatment works.
    • Under the Operator Self-Monitoring (OSM) regime then in force, if there was insufficient flow when an unannounced sampling team arrived, no sample was taken, and the site was not recorded as failing.
    • Prosecutors say company officers arranged operational conditions including, according to the High Court judgment, removing wastewater by tanker  so that flow was artificially stopped when a fail was expected.
    • This allegedly prevented true results reaching the regulators and allowed the company to avoid penalties.
  • Lord Justice Popplewell described the allegations in these terms:
    • “What is alleged … involves carefully planned and extensive fraud and dishonesty at a high level within the company and on a large scale, including, for example, arranging for wastewater to be removed from facilities by tankers in order to create no flow results, with a view to covering up pollution and deceiving those whose function is to protect the public from such harm.”
  • The EA says Southern Water’s own assessment was that the company avoided penalties of the order of £45 million; the Agency’s figure is higher.
  • Conspiracy to defraud carries a maximum sentence of 10 years’ imprisonment. The case will now proceed at Medway Magistrates’ Court.

Related charges

  • Southern Water Services Limited itself faces dozens of charges of failing to comply with or contravening environmental permit conditions at multiple wastewater treatment works between 2013 and 2017.
  • Three further former employees, Mark Butler, Terry Stephens and David James, face separate charges linked to failures to comply with environmental permits.

Company and individual responses

  • Southern Water stated that the charges relate to “a historic set of failures” uncovered through an internal investigation in 2017.
  • The company said it reported the matters to regulators, including the Environment Agency, as soon as they were identified, and that the individuals charged are no longer with the company.
  • Wright’s solicitor said he “denies all wrongdoing and has co-operated fully with the Environment Agency’s investigation.”
  • An EA spokesperson said: “We can confirm that we are taking criminal proceedings against Southern Water Services Limited and a number of former employees. We take our responsibility to protect the environment very seriously and will always pursue and prosecute those alleged to have committed serious environmental offenses. We welcome this important judgment.”

Context

  • The case arises against a background of long-standing public and political concern over sewage discharges and the performance of privatised water companies. The current government has committed to ending the Operator Self-Monitoring regime.
  • These are live criminal proceedings. All defendants are entitled to the presumption of innocence. No findings of guilt have been made.

SOURCES

UNITED KINGDOM LEGAL FRAUD

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As well as owning and publishing Comsure's copyrighted works, Comsure wishes to use the copyright-protected works of others. To do so, Comsure is applying for exemptions in the UK copyright law. There are certain very specific situations where Comsure is permitted to do so without seeking permission from the owner. These exemptions are in the copyright sections of the Copyright, Designs and Patents Act 1988 (as amended)[www.gov.UK/government/publications/copyright-acts-and-related-laws]. Many situations allow for Comsure to apply for exemptions. These include 1] Non-commercial research and private study, 2] Criticism, review and reporting of current events, 3] the copying of works in any medium as long as the use is to illustrate a point. 4] no posting is for commercial purposes [payment]. (for a full list of exemptions, please read here www.gov.uk/guidance/exceptions-to-copyright]. Concerning the exceptions, Comsure will acknowledge the work of the source author by providing a link to the source material. Comsure claims no ownership of non-Comsure content. The non-Comsure articles posted on the Comsure website are deemed important, relevant, and newsworthy to a Comsure audience (e.g. regulated financial services and professional firms [DNFSBs]). Comsure does not wish to take any credit for the publication, and the publication can be read in full in its original form if you click the articles link that always accompanies the news item. Also, Comsure does not seek any payment for highlighting these important articles. If you want any article removed, Comsure will automatically do so on a reasonable request if you email info@comsuregroup.com.  

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As well as owning and publishing Comsure's copyrighted works, Comsure wishes to use the copyright-protected works of others. To do so, Comsure is applying for exemptions in the UK copyright law. There are certain very specific situations where Comsure is permitted to do so without seeking permission from the owner. These exemptions are in the copyright sections of the Copyright, Designs and Patents Act 1988 (as amended)[www.gov.UK/government/publications/copyright-acts-and-related-laws]. Many situations allow for Comsure to apply for exemptions. These include 1] Non-commercial research and private study, 2] Criticism, review and reporting of current events, 3] the copying of works in any medium as long as the use is to illustrate a point. 4] no posting is for commercial purposes [payment]. (for a full list of exemptions, please read here www.gov.uk/guidance/exceptions-to-copyright]. Concerning the exceptions, Comsure will acknowledge the work of the source author by providing a link to the source material. Comsure claims no ownership of non-Comsure content. The non-Comsure articles posted on the Comsure website are deemed important, relevant, and newsworthy to a Comsure audience (e.g. regulated financial services and professional firms [DNFSBs]). Comsure does not wish to take any credit for the publication, and the publication can be read in full in its original form if you click the articles link that always accompanies the news item. Also, Comsure does not seek any payment for highlighting these important articles. If you want any article removed, Comsure will automatically do so on a reasonable request if you email info@comsuregroup.com.