Earlier this month, Cotswold Geotechnical (Holdings) Ltd ("Cotswold") became the first company to be convicted of corporate manslaughter under the Corporate Manslaughter and Homicide Act 2007 ("the Act").

Under the Act, an organisation is guilty of corporate manslaughter if "the way in which its activities are managed or organised causes a person's death and amounts to a gross breach of a relevant duty of care owed by the organisation to the deceased". A substantial part of the breach must have been the way in which its activities are managed or organised by its senior management.

In 2008, Alex Wright, a geologist employed by Cotswold, was killed in a 3.5 metre-deep trench. He had been collecting soil samples when the unsupported walls of the pit collapsed and buried him. Mr Wright died of traumatic asphyxiation. At trial, the prosecution's case was that: Cotswold had failed to take all reasonably practicable steps to protect Mr Wright; Cotswold had ignored well-recognised industry guidance that entry to excavations more than 1.2m deep was prohibited; and Cotswold had left Mr Wright unsupervised on the site.

Companies convicted under the Act can be penalised by way of an unlimited fine. Cotswold was subsequently fined £385,000 to reflect the seriousness of the matter, and also to act as a deterrent to other companies acting in breach of Health and Safety guidance.

The case has been criticised by some on the basis that the Act was not designed to target small businesses such as Cotswold, which had only eight employees. However, the case demonstrates that businesses of all sizes should ensure that they comply with the applicable Health and Safety guidance and industry best practice if they wish to avoid prosecution under the Act. It also suggests that larger businesses may face higher fines if they are convicted.

Case: R v Cotswold Geotechnical (Holdings) Limited