Azenta UK Limited v Environment Agency

This is an appeal by Azenta UK Limited (“Azenta”) against a civil penalty notice (“CPN”) issued by the Environment Agency (“EA”) dated 30 July 2025. The CPN imposes a civil penalty on Azenta of £29,700 for failure to carry out an energy audit contrary to Chapter 3 of Part 4 of The Energy Savings Opportunity Scheme Regulations 2014, as amended (“ESOS Regulations”).

The CPN also requires further steps to be taken by Azenta to comply with an Enforcement Notice (“EN”) that the EA says was issued on 27 November 2024 (for which no penalty has been issued). Those steps are to carry out an ESOS assessment in accordance with Part 4 of the ESOS Regulations and to report the assessment under Part 5. No appeal is brought against those requirements.

By virtue of regulation 49, the effect of the appeal is to suspend the CPN pending the determination of this appeal.

In its Notice of Appeal dated 27 August 2026, Azenta accepts responsibility for its non-compliance with a later Enforcement Notice issued by the EA dated 30 July 2025 concerning its obligations under ESOS. That Enforcement Notice is not supplied. The appeal is made against the imposition of the financial civil penalty in the CPN. Azenta asks the Tribunal to set aside or vary the CPN by reducing the penalty to a nominal amount or waiving it entirely to encourage compliance among similar new entrants.

Azenta argues that the penalty is wrong because it is disproportionate in amount relative to its level of culpability and prompt actions taken in good faith to remedy the situation. In summary, Azenta says, as follows;

It was a new entrant to the ESOS regime. It operated under a genuine lack of awareness of the full requirements, which aligns with “low or no culpability” category in the EA’s Enforcement and Sanctions Policy (“ESP”).

Imposing a full penalty fails to account for mitigating factors, its co-operation and swift corrective measures. The decision is unreasonable and excessive.

At the time of the EN, Azenta was in its first compliance period under ESOS. It qualified as a large undertaking due to operational scale, but without prior experience in the scheme. Significant challenges were faced understanding the obligations, which are complex.

A lack of internal clarity over who should lead environmental reporting activities within the company contributed to its initial non-compliance, as it was not immediately apparent how ESOS applied across its operations. Azenta initially believed the requirements only covered three of its sites in Manchester, Wotton and Cambridge, and not its site at Takeley. It had misunderstood the need to aggregate energy consumption across all its UK sites and the thresholds for energy use. Clarity was only obtained upon engaging a qualified auditor who confirmed Manchester, Wotton and Takeley required full audits, while Cambridge fell out of scope. Azenta believes these factors demonstrate low culpability as the breach was not deliberate, reckless or negligent. It arose from “unforeseeable interpretative challenges for a first-time participant.”

The ESP recognises that new entrants may face reduced penalties for failures in not undertaking an energy audit, capped at £5,000 rather than the £50,000 maximum. Azenta says it has no prior non-compliance history, which should further mitigate the penalty. The decision appears to weight the breach more heavily without due consideration of the context.

Receipt of the EN was delayed due to an email spelling error in the address used by the EA. Azenta says that it only became aware of the EN on 14 January 2025. It responded quickly, took the matter seriously and held an internal meeting on 1 August 2025 to map out remedial actions. On the same day, Azenta initiated the process to source a qualified lead assessor to address the audit gap. It appointed an accredited provider and promptly arranged onsite audits for 18, 27 and 28August 2025.

The auditor committed to uploading all necessary data by the required 30 September 2025 deadline. These actions reflect partial progress already achieved and proactive steps to remedy the breach.

The EA interprets the appeal to be brought on the ground that the CPN was ‘unreasonable’ under regulation 48(1)(c). The EA opposes the appeal. In summary, the EA says:

There is no basis to say the EA’s assessment of the Appellant’s culpability as “negligent” was in any way unreasonable. Azenta is a very large organisation with the ability and obligation to put formal procedures in place to ensure compliance with its legal duties.

Azenta had been told on multiple occasions before the initial and extended deadlines of those obligations. It failed to take any reasonable steps and only held its “initial meeting” in August 2025. It indicates a laissez-faire attitude that can only be described as negligent.

The fact Azenta is a new entrant was already taken into account leading to a reduction of the initial penalty amount of £45,000 (plus daily rate) to £5,000 (plus daily rate). It would be double counting to take it into account again at step 3 of the ESP calculation. The fact Azenta has no prior non-compliance history is already taken into account by it being a new entrant.

The argument that Azenta operated under a “genuine lack of awareness” is misplaced. Given its size and requirement to comply with the law, ignorance of the law is no excuse. It had also been told on multiple occasions of both the scheme and the requirement to comply. That should have sufficed to put any reasonable person on notice.

The argument that the Appellant faced challenges in understanding the regulations go nowhere. Azenta was pointed to various elements of guidance. It does not appear to have even considered obtaining legal advice. It failed to appoint a Lead Assessor until after the penalty was incurred. Its “lack of internal clarity” is its own operational issue and indicates a failure to proactively put procedures in place and tends toward negligence.

The EA maintains that it is incorrect of Azenta to suggest it took “swift corrective measures”. There were awareness letters, a Compliance Notice (“CN”) and issue of the EN from 2023 and throughout 2024. Azenta appears to have only begun exploring the possibility of appointing a Lead Assessor in early 2025 and only initiated the process to source a lead assessor after its meeting in August 2025. This was after the CPN was served. The audit was in August 2025.

The EN was not delayed. It was sent by post, not email.

Belated compliance after a CPN is issued is not reason to reduce a penalty that has already crystallized.

It is unclear on what basis waiving the penalty would encourage compliance among similar new entrants. The EA considers that waiving or reducing the penalty would in fact discourage compliance. It would give the impression that well-resourced entities could simply take no steps prior to a CPN, claim ignorance and then undertake the steps that should have been undertaken anyway.

In reply, the Appellant’s legal representative states that the appeal not only raises the statutory ground of unreasonableness of the penalty, but also that the issue of the CPN was an error of law. In summary:

The CPN was issued under an error of law because the Compliance and Enforcement Notices were not properly served.

Regulation 35(2) and 38(2) require that a compliance notice and enforcement notice each “be served on the person to whom it is addressed”. As the EA is exercising its regulatory power under ESOS, any notice issued under regulation 35, 38 or 39 must be served in accordance with regulation 51.

The EA offers no proof that they mailed “awareness letters” dated 14 December 2023, 29 May 2024 and 26 July 2024. Each letter was addressed to either “FAO Director” or “Company Secretary” with an incomplete address, incorrectly identifying the address as within the county of Lancashire. Azenta contends that it never received the awareness letters.

Similarly, the EA claims to have mailed Azenta a CN dated 11 September 2024 (“the CN”) and an EN dated 27 November 2024, which were addressed in the same way. The EA offers no proof that either notice was served in accordance with regulation 51. Azenta asserts that it did not receive the CN. It acknowledges that the EN was delivered to an employee of Azenta who is neither a Director nor Company Secretary.

As the CN and EN were not properly served in accordance with regulation 51, it is submitted that each is wrong in law under regulation 48(1) and should be cancelled under regulation 50.

Even if the EN was properly served, the penalty amount is excessive and unreasonable.

At steps 1 and 2 of the ESP, despite assessing Azenta as a new scheme entrant, the EA still applied the maximum daily penalty for non-compliance since service of the CN.

The EA erred in setting the final penalty near the top of the range. It did not accurately assess aggravating and mitigating factors.

Azenta’s failure to comply with “awareness letters” and the CN were cited as aggravating factors without proof the letters were received or the CN properly served.

EA failed to consider Azenta’s repeated attempts to contact the EA for clarity an guidance in how to comply with ESOS.

It is accepted that Azenta’s 2 December 2024 email was not received by EA due to a typographical error in the email address. The email was re-sent on 3 December 2024 to the correct email address. The Appellant sent four unanswered follow-up emails on 8 January 2025, 14 January 2025, 22 January 2025 and 4 February 2025. It was over 2 months after Azenta’s first attempt to contact the EA that it finally responded.

It is accepted that the EA contacted Azenta on 5 February 2025 and advised the

Azenta says it is false that it provided no information on its progress. In its email of 17 March 2025 Azenta cited its reasons for requesting a further extension i.e. it had, despite efforts, been unable to secure a Lead Assessor needed to perform the audit. The extension request was declined 2 weeks after the deadline had passed.

As the CN was not served on Azenta, it is argued that it was unreasonable to expect the company to comply. The penalty should not be upheld because the EA did not fairly assess mitigating factors. Instead, it imposed a daily penalty based upon non-compliance with the improperly served CN. Because the CN and EN were improperly served, Azenta says that the CPN was wrong in law. Alternatively, the CPN was unreasonable insofar as it includes a daily penalty for failure to comply with the CN and incorrectly claims that Azenta provided no progress status on its attempt to hire a Lead Assessor.

In an appendix accompanying Azenta’s reply, it accepted responsibility for non-compliance with the EN dated 30 July 2025, but that is not before this Tribunal. It is disregarded accordingly.

Stephen Kitts, Senior Manager, Manufacturing & Installations at Azenta provided a witness statement dated 5 December 2025 in which he stated (in summary):

He is neither a director nor the secretary of Azenta. His day-to-day job is managing facilities in Azenta’s Manchester location where its products are manufactured, including automated sample storage systems.

Administrative staff receive mail from Royal Mail and deliver it to the person addressed on the specific piece of mail. On or around 2 December 2024, Mr Kitts received the EN dated 27 November 2024. It did not contain the full mailing address and was addressed “FAO Director or Company secretary”. Mr Kitts had not received any previous correspondence from the EA and is unaware of anyone else at Azenta having received any previous correspondence. To the best of Mr Kitts knowledge, Azenta does not have anyone in a role to handle such notices. Therefore, Mr Kitts passed the EN to Ian Cartwright, Health & Safety Manager at the Wotton facility, who he believed had more experience of handling such requests.

On or about August 2025, Mr Kitts was added to an environment working group to obtain an assessor and participated in meetings sourcing the assessor and setting up site visits. Mr Kitts was the point of contact when the assessor conducted the audit at Manchester on or around 18 August 2025.

Ian Cartwright, a Health and Safety Manager at Azenta made a witness statement dated 27 November 2025, which (in summary) stated:

Mr Cartwright is neither a director nor the secretary of Azenta. His day-to-day job is manging/overseeing occupational safety compliance in Azenta’s Wotton, Surrey location.

On or about 2 December 2024, Mr Cartwright received the EN from Mr Kitts. Although responding to the EA and is not part of his job duties and he had no prior experience of handling environment enforcement issues, Mr Cartwright had agreed to contact EA to obtain more information. He emailed the EA on 2 December 2024 at what he believed was the email address in the EN. Having noticed a typographical error in the email address, Mr Cartwright re-sent the email on 3 December 2024. He sent four follow-up emails seeking guidance on 8, 14 and 22 January 2025, and 4 February 2025.

On 5 February 2025, Mr Cartwright received a telephone call from a member of the EA’s Enforcement team. He followed the EA’s advice to seek an extension of time for compliance. This was granted until 27 March 2025. Promptly after seeking the extension, Mr Cartwright registered Azenta for the MESOS portal login and began contacting assessors and seeking quotes. On 17 March 2025, he requested a further extension of time, which was refused on 10 April 2025. Mr Cartwright states that he had not received any previous correspondence from the EA and was unaware of anyone else at Azenta who had.

Due to organisational changes, including changes in directors, and environmental compliance not being part of his duties, the search for an assessor was overtaken in priority by Mr Cartwright’s regular duties.

On 1 August 2025 Azenta created an environmental working committee and held a meeting to address completing the ESOS assessment. After the meeting, Azenta contacted the Senior Manager at their parent company who handles similar matters. A follow up meeting was held to seek their guidance on 1 August 2025. Based on discussions with potential assessors, Azenta concluded that the assessment scope was larger than initially believed and included audits of GENEWIZ UK Ltd, which is also owned by the parent company.

On or about 6 August 2025, Azenta engaged an assessor to complete the ESOS audits. The Assessor completed site audits at Azenta’s Manchester location around 18 August 2025, Wotton around 2 September 2025 and GENEWIZ on 28 August 2026. A notice of compliance was submitted thereafter on the MESOS portal.

A witness statement and supplemental witness statement dated 18 December 2025 and 8 January 2026, respectively, were made by Rory Belcher, Senior Technical Officer at the EA. Mr Belcher works within a team responsible for regulating the ESOS Regulations and working to bring undertakings into compliance. He stated:

He has first-hand knowledge of the matters in this appeal.

The qualification date for the third compliance period was 31 December 2022. A company which either employed 250 persons or had an annual turnover exceeding £44miliion and an annual balance sheet total exceeding £38 million on the qualification date are ‘large undertakings’ for the purposes of ESOS.

Large undertakings were required to complete an energy audit to determine their energy use during the compliance period 6 December 2019 and 5 December 2023. The deadline to notify the EA of their compliance with ESOS was 5 June 2024.

A Mr Alan Perry from Azenta had requested to be added to the EA’s newsletter distribution list on 7 December 2022. He was invited to attend a webinar on 25 January 2024.

The EA raises awareness by sending out newsletters to organisations registered with them and by issuing awareness letters to companies the EA believes may qualify for the ESOS Scheme. Regular newsletters were sent out from the beginning of 2023.

Awareness letters were sent out from December 2023 in batches. The addresses were taken from a UK company database Financial Analysis Made Easy (‘FAME’), being a service used by public bodies to readily access account information and documents from Companies House. The service is provided under a framework agreement provided by Government Digital Service and Crown Commercial Services. The first awareness letter was sent to Azenta on 3 January 2024. It is acknowledged that the address was not quite the same as Azenta’s registered office address at Companies House.

Due to the volume of letters, the EA employed a company, HH Global, to issue second and third awareness letters. The company use sub-contractors to support their work.

The second awareness letter was dated 29 May 2024. It was sent to organisations on 10 June 2024. The mailing docket for June 2024 shows 7,098 letters were sent for posting to Royal Mail. As EA sent details of 7,121 companies to HH Global, 23 communications remain unaccounted for. HH Global has been unable to identify which companies were affected. Therefore, Mr Belcher cannot be sure Azenta were sent the second awareness letter.

HH Global were employed to send third awareness letters from 26 July 2024. The docket shows 5,408 letters were sent to Royal Mail for posting which matches the number of company details sent to HH Global. From this, Mr Belcher is confident that letters were posted to each company including Azenta on 2 August 2024.

As Azenta had not submitted a Notification of Compliance by 6 August 2024 the company was included in a file sent to HH Global to arrange the issue of Compliance Notices. The docket for 11 September 2025 shows 4,025 items handed to Roal mail for posting, being the same number of company addresses provided to HH Global.

Mr Belcher had printed the EN to Azenta and took the letters to the EA’s facilities management team for posting. On 28 November 2024, Mr belcher received a Certificate of Posting confirming the EN had been served. The EN contained the same errors in address as before. A response to the EN was received on 14 January 2025.

The remote hearing was attended by Kirsten Rostedt, in-house Counsel, who called Stephen Kitts to give evidence. The Environment Agency was represented by Nick Grant, Counsel. He called Rory Belcher to give evidence. The witnesses’ oral evidence is encompassed within the findings and assessment below.

The hearing began with a Tribunal panel of three composed of one Judge and two Members. Unfortunately, one Member experienced IT problems, which were unresolved after around 30 minutes, leaving them unable to re-connect to the hearing.

Paragraph 15(6) of Schedule 4 to the Tribunal, Courts and Enforcement Act 2007 permits a matter to be decided in the absence of one or more (but not all members) chosen to decide the matter, if the parties to the case agree.

With the consent of both parties, the hearing proceeded with a panel of two comprising one Judge and one Member. The second Member took no further part in the proceedings (including this Decision).

ESOS is a mandatory energy assessment and energy saving scheme which applies to certain undertakings in the United Kingdom. It is undisputed that Azenta is a large undertaking for the purposes of the ESOS Regulations to whom the scheme requirements applied at all material times.

The CPN was issued for failure to carry out an energy audit in accordance with Chapter 3 of Part 4. Regulation 26 of Chapter 3 of Part 4 sets out the duty to carry out an energy audit and regulation 27 stipulates what an energy audit must do. In particular, an energy audit must, so far as reasonably practicable, address matters such as analysing the participant’s energy consumption, identify ways in which it can improve energy efficiency and make recommendations on reasonably practicable and cost-effective measures to be implemented.

Regulation 35 provides for the service of compliance notices. It says:

An enforcement notice may be served under regulation 38(1) where the EA reasonably believes that a responsible undertaking has failed to comply with a requirement of the ESOS Regulations. Under regulation 38(2) and enforcement notice must—

be in writing,

Regulation 39(1) provides that a compliance body may serve a penalty notice in any case where it is satisfied that a responsible undertaking is liable to a civil penalty under Part 8 of the ESOS Regulations.

Under regulation 39(2) of Chapter 1 of Part 8, a penalty notice must:

be in writing,

Where a financial penalty is imposed, and no daily penalty applies or the total amount of daily penalty can be determined, the penalty notice must, under regulation 39(3), specify: (i) the total amount due (ii) where applicable, how it has been calculated, and (iii) to whom, and the date by which it must be paid. The daily rate must be calculated by reference to working days (regulation 39(5)).

Regulation 45 identifies the financial penalties that can be imposed for failure to undertake an energy audit, as follows:

The penalties are—

the financial penalties of—

an initial penalty of £50,000, or such lesser amount as the compliance body may determine, and

a daily penalty of up to £500 for each working day the responsible

the publication penalty.

This appeal is made under regulation 48, which provides:

—(1) A responsible undertaking served with a determination under regulation 35(5) or paragraph 13(2) of Schedule 2, or with an enforcement notice, or a penalty notice, may appeal to the relevant appeal body on the grounds that the determination, enforcement notice or penalty notice (as the case may be) was—

Alan Perry, an employee of Azenta asked to be added to the EA’s newsletter distribution list in December 2022. He was invited to a webinar held on 25 January 2024. It is not known whether he attended.

The EA maintains that it sent three letters to the Appellant to make it aware of the ESOS scheme (described by EA as “awareness letters”). Azenta’s registered office address at Companies House is Gilchrist Road, Northbank Industrial Park, Irlam, Manchester M44 5AY. The correspondence was sent to Azenta UK Limited at Gilchrist Road, Irlam, Manchester, Lancashire M44 5AY.

The EA says that the first awareness letter was sent to Azenta on 3 January 2024. It cannot be sure that the second awareness letter of 29 May 2024 was sent as 23 letters are unaccounted for.

The time limit for submission of the ESOS notification expired on 5 June 2024. The EA says that a third “awareness letter” was posted to Azenta on 26 July 2024. An extension of time for compliance was given until 6 August 2024.

The EA says that it sent a CN to Azenta on 11 September 2024 with a deadline of 25 September 2024 for response. No response was received by the EA. The CN named Azenta’s address at Gilchrist Road, Irlam, Manchester as being in Lancashire. It omitted the name of Northbank Industrial Park after the road name. The address was otherwise correct, including the postcode.

The EN, issued pursuant to regulation 38, followed by post on 27 November 2024. The same address was used as before. The EN was received by an employee of Azenta. It still disputes service as the EN was not addressed to the correct registered office address.

The EN identified two breaches of the ESOS Regulations: (i) failure to carry out an ESOS assessment, including an energy audit, by 6 August 2024, and/or (ii) failure to notify the EA whether Azenta had complied with Part 4 and 6 of the ESOS Regulations by the same date. The EN outlined the steps required for compliance by 27 February 2025.

Ian Cartwright, the Health & Safety Manager at Azenta, emailed the EA on 2 December 2024 saying the Appellant had some questions about a letter from the EA and they “are unclear on what we need to do.” Due to an error in the email address, it was not received by the EA. The same email was re-sent on 3 December 2024 using a corrected address. A chase up email was sent to the EA on 8 January 2025.

When no reply was received, Mr Cartwright emailed the EA’s ESOS Enforcement Team on 14 January 2025 saying that Azenta had been trying to contact the department for over a month and “there have been some confusions over email addresses”. The email repeated the content of those sent previously and provided a direct line and mobile number for someone at EA to call Mr Cartwright. He sent further chase up emails on 22 January 2025 and 4 February 2025

Mr Cartwright spoke to the ESOS, Enforcement Team on 5 February 2025. They sent Mr Cartwright an email that same day with a link to the ESOS guidance “Comply with the Energy Savings Opportunity Scheme (ESOS): phase 3” and referred to section 7.4. The EA recommended that Azenta apply for an extension to the EN deadline while the company sources a lead assessor. Once appointed, Azenta was requested to “please work with them to bring your organisation into compliance as soon as possible by completing and submitting a notification of compliance through the account that you have created on the MESOS portal”.

Azenta requested an extension of time on 5 February 2025. It chased EA for a reply on 18 February 2025.

On 27 February 2025 (the deadline for EN compliance), the EA confirmed that the deadline was extended to 27 March 2025.

On 17 March 2025, Azenta requested a further extension of time due to “significant challenges in completing the process” and struggling “to secure a suitable auditor to carry out the required assessment”.

Compliance with the EN by the extended deadline of 27 March 2025 was not achieved.

A further extension of the EN deadline was refused by EA on 10 April 2025. The EA requested Azenta “to please submit your MESOS notification of compliance as soon as possible, as this will be considered as strong mitigation, and please reply to the Notice of Intent with detailed explanation of why Azenta was unable to comply by the compliance deadline of 5 June 2024, and the extended enforcement notice deadline of 27 March 2025.”

A Notice of Intent (“the NOI”) to impose a civil penalty was sent to Azenta on 11 April 2025. This Notice gave the correct address. Azenta has not disputed that service was effected. It identified three breaches:

Azenta did not provide any progress update or mitigation.

The CPN was issued by the EA on 30 July 2025 for a failure by Azenta to undertake an energy audit contrary to Chapter 3 of Part 4 to the ESOS Regulations.

Azenta accepts that the CPN was properly served. Azenta also accepts that it was aware of the CPN.

Azenta initiated the process to appoint a Lead Assessor after its internal meeting in August 2025. The audits took place in August 2025.

At the time of issue of the CPN, Azenta had not submitted a notification of compliance to confirm that the energy audits had been done. A notification of compliance was submitted to EA on 24 September 2025

Azenta was a new entrant to the ESOS scheme. That is agreed by the parties.

In recognition of this the EA made a reduction from £50,000 to £5,000 to the amount of the initial penalty.

The CPN was properly served by post upon Azenta at its registered office address. Azenta was aware of the CPN. Neither point is in dispute. The Tribunal is content that these preliminary points are met. The issue turns to whether the CPN was wrong in law.

It was clarified at the hearing that Azenta contends that the CPN was served under an error of law due to a failure to properly serve the CN, EN and awareness letters that preceded it.

The Tribunal queried the position taken by Azenta given that (i) the appeal is against the CPN issued for failure to conduct energy audit (ii) there is no appeal against the CN or EN (iii) a CPN could be issued without having first served an EN or CN (iv) the relevance of a CN to the CPN goes to the imposition of a daily penalty under regulation 45 and (v) the relevance of the EN and awareness letters goes to culpability and aggravating/mitigating factors in calculation of the penalty.

Counsel for Azenta, responded that service is not a technicality. If the notices were not sent to the registered office address, there has not been service. Azenta could not respond if it did not receive the notices.

It is plainly right that if the CN was not served then the amount of penalty in the CPN could not include a daily rate under regulation 45(2)(a)(ii).

It strikes the Tribunal that the arguments raised by the Appellant may be more accurately characterised as brought under regulation 48(1)(a) of the ESOS Regulations and the question of whether the CPN was based on an error of fact i.e. was the penalty incorrectly calculated on the basis of (i) a CN having been served, and (ii) an EN and awareness letters having been served drawing attention to the need for compliance. For the avoidance of doubt, we have considered the appeal against all three grounds within regulation 48.

It is necessary to distinguish between the service of notices and correspondence as different provisions apply.

Azenta disputes the proper service of the awareness letters. There was no statutory requirement or provision within the ESOS Regulations for letters to be served before taking enforcement action. The service of the letters is governed by common law.

Contrary to Azenta’s assertion, it is not for the EA to prove receipt of the letters. At common law there is a rebuttable presumption that a properly directed letter that is proved to have been put in the post has reached its destination according to the regular course of post, and that it was received by the person to whom it is addressed (Khan v D’Aubigny [2025] EWCA Civ 11 at [77] to [79]). A mere assertion of non-receipt does not suffice to rebut the presumption. It is for the Tribunal to make an assessment with reference to the relevant facts and an assessment of the witness’ credibility and reliability.

Mr Belcher gave written and oral evidence for the EA. Details were to the Tribunal of the number of letters issued in batches. Mr Belcher is confident that awareness letters were sent to Azenta on 3 January 2024 and 26 July 2024. Mr Belcher fairly acknowledged in his evidence that he cannot be sure that the second awareness letter of 29 May 2024 was sent out because 23 letters out of 7,121 are unaccounted for.

The EA accepts that the address used in each of the letters was not wholly correct because Lancashire was erroneously added as the county and the name of the industrial estate was omitted.

Azenta was critical of the EA for using a private company database (FAME) to source addresses rather than Companies House. Under cross-examination, Mr Belcher stated that the database draws upon Companies House data. He confirmed that the addresses were not checked against the registered office address that is readily available on Companies House website. He pointed out that the volume of letters, which ran into thousands, made it impractical to manually conduct checks.

How the errors arose is irrelevant to the question of service. The fact remains that

In oral evidence, Mr Belcher explained that Manchester was placed outside the county boundary of Lancashire. It was his evidence that the postcode was key, and there would be no place in Lancashire with that postcode. We find it implausible that the Royal Mail would be confused by the inclusion of the wrong County name. As Mr Kitts fairly accepted under cross-examination, Manchester is a large and well-known place. Royal Mail would know where it is.

Mr Kitts confirmed there a number of industrial units in the road. Azenta’s premises is a big, white building with the company name on top in large letters and a sign with its name on the gate. Mr Kitts accepted that if someone found their way to Gilchrist Road, they were already at Northbank Industrial Park and they would find their way to the front of the building. In the circumstances, we consider the omission of the name of the Industrial Park to be inconsequential.

With the correct company name, road and postcode, we find that the letters were sufficiently addressed to reach the company at its registered office address. We are further satisfied from the mailing dockets and explanation of Mr Belcher that the first and third awareness letters were posted. There is a tiny possibility that the second awareness letter to Azenta was 1 of the 23 letters (out of over 7,000) that was not posted. On the balance of probabilities, it was sent but nothing turns on this one letter and so we disregard it.

We go on to consider if there is any evidence to rebut the presumption of service.

Azenta took issue with the letters being marked ‘FAO Director or Company Secretary’. All companies are required to have at least one company director and may have a company secretary. Upon the evidence of Mr Kitts, he did not know who the company director/s or secretary are or if they were based at the Manchester address.

It is standard convention for official letters and documents to be addressed to ‘Director or Company Secretary’ at a company. This reflects section 1140 of the Companies Act 2006 which provides for the service of documents (whatever their purpose) on a director or secretary of a company by leaving those documents at, or sending them by post to, the person's registered address. In effect, the EA was alerting the company to the importance of the communication. The key point is that the letters were addressed to the correct company name for delivery.

It does not suffice to rebut the presumption of effective service that the letters did not come to the attention of a director or the company secretary.

On the evidence of Mr Kitts, the administrative staff at the front desk receive post from Royal Mail. They tend to open it and give it a cursory look to see who it should go to. As far as Mr Kitts was aware, there is no policy to log letters and no database or other means of recording the receipt of post. He accepted that post could have been sat on an admin desk. Mr Kitts had asked one of the three members of the admin team if they recalled these items and they did not.

Both witnesses appeared credible and gave fair answers acknowledging where weaknesses exist in their evidence.

In all the circumstances, the Tribunal is satisfied that the awareness letters of 3 January 2024 and 26 July 2024 were presumed to be served and the Appellant’s evidence does not rebut that presumption.

The issue turns to service of the formal notices which preceded the CPN. Specifically, whether the CN dated 11 September 2024 was properly served under regulation 35 and the EN dated 27 November 2024 was properly served under regulation 38. In both cases the notice must “be served on the person to whom it is addressed.” Service is the process by which the notice becomes legally effective.

It is worth making some initial observations. Firstly, there is no appeal against the EN and so the Tribunal cannot cancel it in these proceedings, as Azenta seeks.

Secondly, the CPN was not issued for failure to comply with the CN. It was issued for failure to carry out an energy audit. The significance of proper service of the CN is the impact upon the amount of financial penalty that can be imposed. Pursuant to regulation 45, the applicable penalty for failure to carry out an audit contrary to Chapter 3 of Part 4 is an initial financial penalty of £50,000, or such lesser amount as the compliance body may determine (reg 35(2)(a)(i)). That is unaffected by the service of any compliance notice.

It is the additional daily penalty that is calculated with reference to service of the CN. A daily penalty of may be imposed of up to £500 for each working day the responsible undertaking remains in breach, starting on the day after the service of the CN, subject to a maximum of 80 working days i.e. £40,000 maximum (regulation 35(2)(a)(ii)). It follows that if the CN was not served, then a daily penalty could not be imposed because there is no starting point for the purposes of regulation 35(2)(a)(ii).

At the hearing Azenta argued that the EA could not prove receipt of the CN and EN and the EA has the burden of proof. This is not the correct approach. There is not a requirement to prove receipt.

As confirmed by the Upper Tribunal in Environment Agency v Elizabeth Arden (UK) Ltd [2023] UKUT 180 (AAC) at [11], while regulation 35, 38 and 39 provide that the EA may serve the appropriate notice, the requirements of regulation 51 nevertheless apply. It has to be interpreted in the context of the EA exercising its powers as the ESOS regulator. This means that “when the circumstances justify a notice being issued, it is proper to say that there is a requirement that it be served.” The Upper Tribunal went on to say that:

“12.

As regulation 51 applies, section 7 of the Interpretation Act 1978 becomes relevant because it provides for: (a) the means by which service may be effected; and (b) a rebuttable presumption of when service is effected.”

With post to the registered office, the Upper Tribunal stated at [14] to [15] that the “starting point was for EA to prove that the penalty notice had been sent in accordance with regulation 51 and section 7. If EA could show posting, [the company] would then have the opportunity to prove that the notice did not arrive.”

As set out more fully above, service is deemed to be effected, under section 7 by properly addressing, pre-paying and posting a letter containing a document. Unless the contrary is proved, service is deemed to have been effected at the time at which the letter would be delivered in the ordinary course of post.

For the purposes of section 7, a letter or package may be “properly addressed” even though it contains an error, if the error would not have been likely to affect the place to which the Royal Mail would deliver it (Xenfin Fund Trading Limited (in liquidation) v GfG Limited & others [2025] EWHC 172 (Ch) at [19]).

Under regulation 35, a CN must be served on the person to whom it is addressed. The person to whom the CN was addressed was the company, being a body corporate. The requirements for the service of documents are explicitly addressed in regulation 51. Service is effected by delivering or sending a notice or leaving it at a company’s registered office address (regulation 51(a)(i)). There are corresponding provisions under regulation 38 for the EN.

There is no requirement within regulation 35, 38 or 51 for the notice to be addressed to an individual within the company, which has its own separate legal identity. Azenta was the intended recipient. Both notices were sent to the registered office address in Irlam, Manchester, but with the name of the county of Lancashire added before the postcode and the name of the Business Park omitted.

As with the awareness letters, the errors would not be likely to affect the place to which Royal Mail would deliver the notices. Much in the same way as occurred in Xenfin, the Royal Mail will have ignored the erroneous County name. With the correct road name and postcode, the omission of the Business Park was immaterial.

On the facts of this case, both the CN and EN were sent by the EA to Azenta at the proper address, save for minor errors which would not have influenced service.

There is one difference in the circumstances with the EN issued under regulation 38. Azenta acknowledges that an employee received the EN. In oral evidence, Mr Kitts confirmed he had received the EN sent under covering letter dated 27 November 2024. Despite this, Counsel pursued a line of argument that the EN was not properly served because it was not sent to the registered office address and it had not been received by a company director or the company secretary. As such, Azenta could not be expected to comply. However, on the facts and evidence, the EN was not only deemed to be served upon Azenta but confirmed as actually received. Neither EN nor CN were sent to a different registered office address.

Once service is presumed, the Appellant bears the burden of rebutting the presumption of receipt. If the presumption is rebutted, then the legal burden returns to the EA. In London Borough of Southwark v Akhtar [2017] UKUT 150 (LC), a case concerning notices under a lease, the operation of this approach was described, as follows:

“82.

A legal presumption like the one in s.7 has the effect of reversing the burden of proof. Once the landlord has proved that the notice was properly addressed, pre-paid and posted it has nothing further to do – unless the contrary is proved. If the contrary is proved, then the landlord must, as it were, go the long way round and actually prove service without the help of the presumption and must therefore convince the tribunal on the balance of probabilities that the notice was actually received. But it is only required to do that if the contrary is proved, and not if the contrary is merely asserted.”

Even though the notices were not received by a director or the company secretary, the Appellant has not rebutted the presumption that the CN was, as a matter of law, received. When applying section 7 of the Interpretation Act 1978, the Tribunal finds that the CN was received by the Appellant “at the time the letter would be delivered in the ordinary course of post”. Azenta stated in its grounds of appeal that it was not aware of the EN until 14 January 2025 due to an error in the email address. That cannot be right because the EN was sent by second class post and not email. It is also contradicted by Azenta’s own witnesses who both say they received the EN (that was posted on 27 November 2024) on or about 2 December 2024. We take that as the approximate date of service.

Provided a notice is received at the ‘proper address’ there is no requirement within the ESOS Regulations for either the CN or the EN to be passed on to a particular individual within the company or for any such individual to respond before service of a notice is effective. The person to whom each notice was addressed was the body corporate. It was the intended recipient and the legal person affected.

As made plain by the Court of Appeal in R(Alam) v SSHD [2020] EWHC Civ 1527 the burden of proving non-receipt will not be lightly discharged in the face of convincing evidence leading to the expectation of receipt. In particular, it will not be discharged by evidence, far less mere assertion, that the notice did not come to the attention of the person affected [31].

The Appellant asserts non-service of the CN in the mistaken belief that the EA must prove receipt notwithstanding that the EA relied upon the deemed service provisions. Azenta has simply not produced sufficient evidence to rebut the presumption of service, and plainly the EN was received.

We find no basis to conclude that the CPN was wrong in law in circumstances where service of the CPN was effected and the only arguments raised on lawfulness pertain to the service of earlier notices and letters. Had the CPN not been served then it would have had no legal effect. But that is not what happened here. There is no argument over the CPN being properly served. It took effect once served and it is undisputed that Azenta was aware of the CPN.

The next question for the Tribunal is whether the imposition of the penalty and the amount are ‘unreasonable’.

The EA refers us to the previous First-tier Tribunal decision of Marlborough Sterling Investment Group v EA [2023] UKFTT 681 (GRC) where Judge Bird KC said at [18]: “Unreasonable in this context bears its ordinary meaning i.e. one which having regard to the circumstances is unfair, unsound or excessive.”

Our attention is also drawn to the words of Lord Hoffman in SSHD v Rehman[2003] 1 AC 153 at [49] that an inherent limitation of the judicial function in the appellate process is “the need, in matters of judgment and evaluation ofevidence, to show proper deference to the primary decision-maker.”

The EA highlights how the First-tier Tribunal reflected such deference in Safeguard World International Holdings Ltd v EA[2024] UKFTT 34 (GRC) at [12] where Judge Neville (as he then was) also applied the same interpretation of ‘unreasonable’ as Judge Bird KC, but added:

“while [the Tribunal] decides the matter for itself, appropriate weight must be afforded to the view taken by the Environment Agency: the regulator entrusted by Parliament to administer the scheme and maintain its integrity and effectiveness, and having expertise and experience in doing so; see Hesham Ali v Secretary of State for the Home Department [2016] UKSC 60 at [45].”

This Tribunal is not bound by previous First-tier Tribunal decisions, but we concur with both the interpretation and approach taken in those previous decisions. We might add that ‘unreasonable’ could sensibly include a decision that was unjust. Of course, showing proper deference does not mean that the EA’s decision must be right. The evidence as a whole must still be considered and weighed up before reaching a view. We have taken care to do this.

The key point is that regulation 48(1) limits the grounds of appeal to three categories, one of which must be made out for the appeal to succeed. It follows that the Tribunal cannot be stepping into the shoes of the EA and deciding the matter totally afresh. Instead, the Tribunal is deciding whether the CPN was based on an error of fact, wrong in law or unreasonable. If so, the Tribunal must then decide how to exercise its discretion under regulation 50 in all the circumstances.

The Tribunal’s powers under regulation 50 of the ESOS Regulations include affirming a penalty notice with such modification as it thinks fit.

In essence, the Appellant’s arguments may be distilled to the penalty being disproportionate because: (i) of reasons relating to the company being a new entrant to the ESOS scheme (ii) it did not understand the requirements of the scheme (iii) it acted quickly and attempted to become compliant once aware of the EN, and (iv) it has since become compliant.

The ESP published by the EA has three annexes. It is Section D of Annex 2 that applies to ESOS. The latest version of Annex 2 is provided. It was updated in October 2025 after the CPN was issued, but the EA confirmed that the changes do not affect the ESOS scheme.

The ESP sets out a 4-stepped approach which the EA applied to set the penalty level:

The Tribunal has applied the same stepped approach to determine if the penalty was unreasonable, it being the established methodology which provides a rational and consistent approach to ESOS enforcement. In doing so, we recognise that the ESP does not have the force of law. It is policy guidance only.

Pursuant to regulation 45(2)(a)(i) the statutory maximum initial penalty is £50,000. The statutory maximum daily rate is £40,000 where the breach has continued for 80 working days, calculated at £500 per day. As the CN dated 11 September 2024 was deemed served by ordinary post, which would have been on or about two working days later, over 80 days had expired by the time the CPN dated 30 July 2025 was served. The maximum daily rate was £40,000.

Therefore, the statutory maximum amount was £90,000 a stated in the CPN.

At step 2, the initial penalty amount is set by assessing the nature of the breach and the position in line with Section D of the ESP. Section D2.3 of the ESP applies to a failure to undertake an energy audit, as in this case. It states that undertaking an energy audit is a key requirement of ESOS. This breach impacts on the integrity of the ESOS, and the EA will therefore normally issue a penalty for failure to undertake an energy audit. For new entrants to ESOS, in the compliance period in which they first enter the scheme, EA will normally impose a lower initial penalty of up to £5,000 for failure to undertake an energy audit.

The EA applied this policy provision to reduce the initial penalty to £5,000 in recognition of Azenta being a new entrant to the ESOS scheme.

The ESP does not elaborate on when the initial penalty starting point might be lower than £5,000. We bear in mind that these are important environmental requirements. It was also a long-standing breach of around one year by the time of the CPN. We concur that £5,000 is an appropriate initial penalty amount.

The ESP is silent on reducing the daily amount to reflect a company being a new entrant. The Tribunal notes the wording of regulation 45(2)(a)(ii) which refers to a daily amount of “up to £500 for each working day”. The daily sum could thus be less than £500 per working day. However, that does not mean there must or ought to be another reduction for a first-time entrant. We find nothing wrong in the EA’s approach of applying a reduction of £45,000 solely to the initial penalty and not to the daily penalty. This results in the initial penalty amount being set at £45,000, as per the CPN.

Next, we consider the penalty starting point and penalty range, based on culpability i.e. level of blame, and size of the organisation. The ESP identifies four categories of culpability in descending order of seriousness (i) deliberate (ii) reckless (iii) negligent (iv) low or no culpability. The EA identified Azenta as ‘negligent’. Azenta considers this unfair as Mr Kitts and Mr Cartwright tried to resolve the situation and their actions ultimately led to the audit being conducted to secure compliance.

There is no suggestion that Azenta intentionally breached or showed a flagrant disregard for the law for its conduct to be deliberate. Nor is there sufficient basis to conclude that there was reckless failure by Azenta to put in place, and to enforce, such systems as could reasonably be expected in all the circumstances to avoid a breach.

‘Negligent’ means failure by the organisation as a whole to take reasonable care to put in place and enforce proper systems for avoiding commission of the breach. The conduct of Azenta falls squarely within this category. It cannot be considered to be ‘low or no culpability’, which applies to a breach with little or no fault on the part of the organisation as a whole.

Azenta is a large company. Yet, it had nothing in place to ensure its compliance with the ESOS Regulations.

In December 2022 Alan Perry from Azenta registered with the EA to receive its newsletters. According to Mr Kitts, Mr Perry had worked at the Manchester site in health and safety. The extent of Mr Perry’s knowledge of ESOS is unknown or whether he attended the EA webinar to which he was invited on 25 January 2024. Mr Kitts did not believe Mr Perry to be the designated ESOS lead. However, Mr Perry must have had some level of awareness of ESOS to sign up for EA newsletters on the topic. When Mr Perry retired in early 2024, there was a gap according to Mr Kitts before another health and safety person was appointed. Mr Cartwright covered in the interim from the Wotton site.

From the evidence of both Azenta’s witnesses, the company had no person appointed as responsible for its ESOS compliance. There were also no systems set up to ensure that official notices were recorded, directed to the right person and actioned.

The Tribunal heard how Mr Kitts received the EN. Thinking it was an environmental matter, he contacted Mr Cartwright as the person with responsibility with health and safety who he considered most likely to help. Mr Kitts realised that Azenta was late on something, but he did not understand what it was. Mr Kitts believes he passed the EN to Mr Cartwright on the same day on or about 2 December 2024. Mr Cartwright acted upon the EN straight away by attempting to contact the EA. Unfortunately, he initially emailed the incorrect address. He did send follow up emails without reply. After speaking to someone at the EA on 5 February 2025, Mr Cartwright promptly applied for and secured an extension of time for compliance until 27 March 2025. One quote from an assessor was obtained on 6 February 2025 but it was not pursued.

A further extension of time was sought on 17 March 2025 to continue to seek an assessor. That extension was refused by the EA on 10 April 2025. On Mr Cartwright’s evidence, no further steps were taken whilst he prioritised his regular duties until after the CPN of 30 July 2025 was served. In the meantime, Azenta did not continue to engage with the EA.

We have no reason to disbelieve Azenta’s two witnesses when they said that they had not personally received anything from the EA prior to the EN. However, we have been satisfied that at least two awareness letters and CN were served prior to the EN. There was also a NOI of 11 April 2025 to impose a civil penalty which warned of the pending imposition of a financial penalty. There is no suggestion of non-receipt of this NOI.

Azenta was required to carry out an energy audit by the extended deadline of 6 August 2024. It was almost a year later that the CPN of 30 July 2025 was served. It was a very long time before Azenta started work on fulfilling its duties. Even then, the company did not give priority to appointing an assessor. It was not until after the CPN was issued that a meeting took place on 1 August 2025, and the matter given the attention it required. Multiple opportunities were given by the EA. Once the 1 August 2025 meeting took place, action was taken quickly. This demonstrates that Azenta had the capability to achieve compliance much earlier. It clearly had the means. This was not a small company with limited resource.

The Tribunal concurs with the EA’s finding that Azenta was negligent.

This is not criticism of Mr Kitts or Mr Cartwright who found themselves in receipt of the EN. The matter fell outside their day-to-day responsibilities, and they were seemingly left without the necessary support. The responsibility was that of the company.

The size of the organisation is determined under the ESP by reference to its turnover. The strategic report for the year ended 30 September 2023 shows that its revenue for the year exceeded £76 million. Azenta’s turnover falls into the category of a ‘large’ company with a turnover of £50 million or more.

Once the culpability category and size of the company is established, it is an arithmetical exercise to identify the appropriate penalty starting point and penalty range. The EA has correctly applied the ESP by using a multiplier of 0.3 to the initial penalty amount of £45,000 to set the penalty starting point at £13,500. The penalty range is also correct at £6,300 to £33,750.

Consideration turns to assessment of the aggravating and mitigating factors.

The EA identified three aggravating factors. Firstly, that Azenta failed to appoint a lead assessor within the extended EN deadline, even after support was provided on requirements and next steps. This is factually correct and reasonable. It was not until after the CPN was served before Azenta appointed an assessor on or around 6 August 2025. Azenta criticises the EA for failing to give a further extension of time to source an assessor when requested on 17 March 2025. However, an extension of time was discretionary, and by then there had been non-compliance for a year. There had already been long delay.

The Tribunal accepts that this reason for seeking a further extension of time provided a very brief update. It was a single email after being provided with advice from the EA on 5 February 2025. Moreover, by the date of the CPN on 30 July 2025, a NOI dated 11 April 2025 had been issued to Azenta without response. In those circumstances, it was reasonable for the EA to rely on the failure to provide updates as an aggravating factor.

Thirdly, it is undisputable that Azenta remained non-compliant at the date of the CPN. Compliance was not achieved until notification of compliance was filed on 24 September 2025.

Turning to mitigating factors, the EA identified only one being Azenta’s swift response to the EN to seek guidance although not received by the ESOS Team until 14 January 2025. Plainly, the efforts made by Mr Cartwright to contact the EA were recognised and accounted for as mitigation. It was reasonable to do so.

Contrary to Azenta’s suggestion, it did not act swifty at all times and take the necessary measures with the required sense of urgency. By Mr Cartwight’s own admission, his regular duties took priority and there was a lull between around March 2025, and the matter being picked up again after the CPN was served.

Whilst compliance was achieved within a few weeks of Azenta holding its meeting on 1 August 2025, and appointment of an assessor a few days later, this all post-dated the issue of the CPN. Steps taken after a CPN has been issued do not mitigate the non-compliance that had already occurred and had been ongoing for around a year or so.

Azenta claims a genuine lack of awareness, but ignorance of the requirements is no excuse. It was incumbent upon this large company to ascertain and comply with any applicable legal requirements. That included its legal obligations under the ESOS Regulations. In any event, while Azenta disputed receipt of correspondence along with the EN and CN (as addressed above), it plainly had received the EN which prompted Mr Cartwright to attempt to contact the EA. The EN is one of the steps to draw attention to the need for an energy audit. Azenta was on full notice that it needed to act and urgently.

Part of the delay was attributable to Mr Cartwright being unable to contact the ESOS Team after he used the wrong email address. As the EA pointed out, there was online guidance available. A link to the ESP was provided within the CPN.

In closing submissions, Azenta argued there had been no pollution from non- compliance or other environmental harm. That misunderstands these important

Azenta had no history of non-compliance because it had never been in ESOS before. We agree with the EA that it would be double counting to reduce the penalty further for lack of a history of non-compliance. It was already factored in when the initial penalty was reduced from £50,000 to £5,000 as a new entrant.

We find no reasonable basis to conclude that waiving the penalty would encourage compliance among similar new entrants. If anything, it would discourage prompt compliance if undertakings thought they could breach the requirements and secure a waiver by holding out.

The Tribunal has identified one further relevant mitigating factor in terms of those matters listed in the ESP, which include the attitude of the non-compliant person. The Tribunal agrees with the EA that the attitude of Azenta has been lax for the most part. That said, at no time has it disputed the need for compliance with ESOS. It belatedly accepted responsibility and did take some steps towards remedying the problem by contacting assessors and obtaining a quote. This carries limited weight only given the duration of the ongoing breach and that the matter was not pro-actively followed up and an assessor instructed until after the CPN. On balance, we consider it reasonable to make a very small additional allowance against this item.

When considering the factors as whole, the EA was right to find that the aggravating factors outweigh those in mitigation warranting a penalty above the mid-range point. The Tribunal has not had the benefit of any witness evidence on the calculation of the deduction made by the EA in respect of the one mitigating factor it identified. It equates to a 12% reduction on the maximum amount of £33,750 within the penalty range. Whilst giving a level of deference to the EA as the appointed body tasked with enforcing the ESOS Regulations, we consider it reasonable to make a further reduction to 15% for the additional matter we have identified above.

To that very limited extent the amount of penalty was unreasonable.

The Tribunal concludes that the CPN in this case should be affirmed but modified to a financial penalty of £28,687.50.

The appeal therefore succeeds in part, and the Tribunal directs accordingly.