Gloucestershire-based Cotswold Geotechnical Holdings was charged with corporate manslaughter following the death of 27-year-old Alex Wright in September 2008. Wright was a junior geologist investigating soil conditions in a deep trench on a development plot in Stroud when it collapsed and killed him.
Sentence was passed this afternoon by Justice Field. He said the gross breach of the company's duty to Wright was a "grave offence". He said the company, which was described in court as in a parlous financial state, could pay the money back over 10 years at a rate of GBP38,500 per annum.
He added that the fine marked the gravity of the offence and the deterrent effect it would have on companies to strongly adhere to health and safety guidance. But he added the company was on a small scale and a larger fine would cause it to be liquidated, and four people presently employed would lose their jobs.
"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," he said.
No-one was in the dock for the three-week trial but the business denied corporate manslaughter. The prosecution was the first under the new Corporate Manslaughter and Corporate Homicide Act 2007.
The fine is less than the starting point of £500,000 recommended by the Sentencing Guidelines Council (SGC).
David Foster, head of dispute resolution at Barlow Robbins, said health and safety had jumped to the top of boardroom agendas with the large fine.
"The Courts are sending a clear message and are willing to have a fine that causes pain over a long period – in this case 10 years," he said.
Berrymans Lace Mawer partner, Helen Devery, said the act had finally come of age. "An appeal may be pending but the size of the fine will be a warning shot to all organisations that safety must not be compromised," she said.
"Although the fine is less than the starting point of £500,000 recommended by the Sentencing Guidelines Council (SGC) it will no doubt have a dramatic impact on a company of this size, reflecting the trend towards harsher penalties. The size of the fine is intended to make a significant impact on any organisation and while CGH may have had a modest turnover, larger and more profitable organisations, successfully convicted, can expect fines well above the SGC’s £500,000 staring point."
Jonathan Grimes, partner and health & safety law expert at Kingsley Napley, added: "This is a very substantial fine for a firm of this size. That this fine is lower than the recommended level will be a reflection of the company’s limited means."
The conviction of Cotswold Geotechnical Holdings for corporate manslaughter will herald an avalanche of similar cases, lawyers today warned.
