Yesterday afternoon, Cotswold Geotechnical Holdings was fined £385,000 following its conviction for corporate manslaughter which came earlier this week.

The conviction by jury follows a lengthy trial into the death of Alex Wright, a young geologist employed by the company, on 5 September 2008. Mr Wright is believed to have died whilst investigating soil conditions in a deep trench, which collapsed and killed him.

Commentators had been watching the case – the first of its kind – as it made its way through the court process. Particular interest has focused on how the Sentencing Guidelines on Corporate Manslaughter (issued in February 2010) might be interpreted and applied to any corporate manslaughter conviction. If followed closely by the courts, the Guidelines were expected to give rise to a new era of substantial fines for above and beyond what is currently imposed for health and safety offences. The guidance is clear that it would not be unreasonable to expect fines in the millions (rather than hundreds of thousands) of pounds and a starting point for fines would be a £500,000.

The fact that the fine imposed on Cotswold Geotechnical Holdings does not quite meet the minimum level set by the guidelines is a direct reflection on what the judge described as the company’s “parlous financial state”. Whilst the objective of sentencing is to provide adequate deterrent to other companies who may commit health and safety offences, it should not have the effect of putting the company out of business and causing employees to lose their jobs. There can be little doubt that in the context of the company’s ability to pay, the fine is considerable and sets the tone for future corporate manslaughter cases. The real question will be however, how this case will be interpreted in the future and in particular, the fines that will be imposed where the convicted entity is a much larger, high turnover company. On the strength of yesterday’s sentencing, it certainly seems that fines in their millions will occur in the not too distant future.