Court of Appeal refuses company leave to appeal against fine that will put it out of business
In February 2011 Cotswold Geotechnical Holdings Limited (CGH) became the first company to be convicted of corporate manslaughter under the Corporate Manslaughter and Corporate Homicide Act 2007. We discussed CGH’s conviction in this post.
CGH was sentenced to a fine of £385,000. The trial judge noted the small size of the company and gave CGH ten years to pay in yearly instalments, but stated – given the serious nature of the offence – that if the fine caused CGH to go into liquidation, that was an acceptable consequence of imposing the fine.
CGH applied to the Court of Appeal for leave to appeal against the fine. As reported to in The Times Law Report (paywall) today, the Court of Appeal had regard to the Sentencing Council’s guideline on corporate manslaughter of February 2010. Whilst paragraph 16 of those guidelines says that:
“The court should…look carefully at both turnover and profit, and also at assets, in order to gauge the resources of the defendant. When taking account of financial circumstances, statute provides for that to either increase or decrease the amount of the fine and it is just that a wealthy defendant should pay a larger fine than a poor one; whilst a fine is intended to inflict painful punishment, it should be one which the defendant is capable of paying, if appropriate over a period which may be up to a number of years”
paragraph 19(viii) of the guidelines states that in assessing the financial consequences of a fine, the court should, amongst other matters, consider:
“whether the fine will have the effect of putting the defendant out of business will be relevant; in some bad cases this may be an acceptable consequence”
The Court of Appeal approved the decision of the trial judge that the fact that the fine would put CGH out of business was an acceptable consequence of imposing the fine, and refused CGH leave to appeal.
Friendly Corporate PSL
To subscribe for our free weekly update e-mail, click here.