Corporate Manslaughter Act: First conviction is a warning for companies

May 10, 2011

Introduction

In the recent case of R v Cotswold Geotechnical Holdings Limited a jury found that Cotswold Geotechnical, a small mining company, had ignored safety guidelines which led to the death of Alexander Wright, a geologist who died when a pit collapsed. The court levied a fine of £385,000 on the company, which will mean it could go into liquidation as a result.

The Corporate Manslaughter and Corporate Homicide Act 2007 came into effect in 2008, yet it has taken until February 2011 for the first company to be convicted under it. This case provides a timely reminder that the Courts are willing to impose substantial and unlimited fines on companies who contravene the Act, which are calculated according to the size of the company in question. The Act also gives the Court powers to hold directors personally liable alongside the company.

Facts

Mr Wright worked as a geologist for Cotswold Geotechnical and was investigating soil conditions on a development plot. Mr Wright was left working alone in a 3.5 metre-deep trench after the company director had gone home for the day. The two people who owned the development site decided to stay at the site as they were aware that Mr Wright was working in the trench alone. The earth subsequently fell in around Mr Wright and buried him up to his head. Despite the site owners’ best attempts to try and save him, Mr Wright died of traumatic asphyxiation.

Outcome

In convicting the company, the jury found that its system of work (regarding the digging of trial pits) was "extremely irresponsible and dangerous" and failed to comply with the well-recognised industry guidance. The company was fined £385,000 (payable over ten years due to its weak financial position). The company director, Peter Eaton, was also charged with gross negligence manslaughter and a health and safety offence, but a judge ruled that he was too unwell to stand trial.

Implications

  • Companies must adhere to all health and safety guidelines applicable to their industry sectors.
  • The case highlights the need for companies to consider the sentencing guidelines as they apply not only to corporate manslaughter cases but also to health and safety breaches resulting in death.
  • Whilst it was only the company that was ultimately convicted in this instance, company directors should be mindful that the Court has powers to hold directors personally liable.
  • One of the main messages from the judgment is that a bigger company would have received a substantially higher penalty, and that fines which can potentially cause liquidation cannot be ruled out.

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