Cotswold Geotechnical Holdings, the first company to be convicted for corporate manslaughter in the UK, has been fined £385,000 – a penalty that risks putting it out of business.
The move follows the death of junior geologist 27-year old Alexander Wright from Cheltenham in September 2008. He was investigating soil conditions in a deep trench on a development plot in Stroud when it collapsed and killed him.
The judge Mr Justice Field said that Wright’s death had been the result of a gross breach of the company’s duty towards him and was a “grave offence”. But he described the firm, which employs four people, as being in a parlous financial state and said it could pay the money back over 10 years at a rate of £38,500 per annum.
The high level of penalty for such a small company was meant to indicate the gravity of the situation and was intended to have a deterrent effect on other companies to ensure they adhered strongly to health and safety guidelines. But to have fined it in line with the starting point of £500,000 recommended by the Sentencing Guidelines Committee risked putting it out of business.
“It may well be that the fine in the terms of its payment will put this company into liquidation. If that is the case, it’s unfortunate but unavoidable. But it’s a consequence of the serious breach,” Mr Justice Field said.
Company director Peter Eaton was not in the dock for the three-week trial as he is seriously ill with cancer and has months to live, the court heard, but the business had denied corporate manslaughter. Although unable to stand trial, the jury was told to assess his conduct in reaching a verdict.
The judge said that Eaton was effectively the company and his approach to trial pitting was “extremely irresponsible and dangerous”.
The prosecution was the first under the new Corporate Manslaughter and Corporate Homicide Act 2007, for which the penalty is an unlimited fine. To secure a conviction under the legislation, the prosecution must prove that gross negligence at a corporate level led to a death. It must also prove that a substantial part of any breach was the result of the way the organisation’s activities were organised or managed.
