Entity defence is essential

Company sentenced in first corporate manslaughter case

Cotswold Geotechnical Holdings Ltd (CGH) was fined £385,000, following its conviction for corporate manslaughter at Winchester Crown Court on 15 February 2011. The company is the first to be convicted of the new offence under the Corporate Manslaughter and Corporate Homicide Act 2007.

The case

Alex Wright was a 27-years-old geologist working for CGH when he died on 5 September 2008. He was investigating soil conditions in a deep trench on a development plot in Stroud when it collapsed and killed him.

Sentence was passed by The Honourable Mr Justice Field. Berrymans Lace Mawer LLP partner, Helen Devery said:

“After many years of discussion and debate the new Act has finally come of age with its first conviction. 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. 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 whilst 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.”

What does it mean for you?

1. Health & Safety regimes must be well documented and practiced

2. Check that your insurance policy provides Entity Defence cover

As this is a criminal conviction, Entity Defence wouldn’t pay for the fine (as that would not be in the public interest) but would pay for the defence costs which no doubt run into many £’000’s