My employer has gone bust. Does that mean I can’t claim?
By David Healey, Senior Solicitor · Carter & Carter Solicitors · April 2026 · Accidents at Work
WHAT YOU NEED TO KNOW ABOUT THIS CASE
Last week a court fined a company £1 after a 24-year-old lost both legs at work. Here is why that headline is not the whole story — and why it matters if your employer has gone bust.
A 15-tonne excavator reversed over a 24-year-old worker at a Hampshire waste yard in November 2023. Both lower legs were amputated. He has not worked since. His employer was fined £1 — because it had already gone into liquidation.
The £1 fine is what the court could extract from a dissolved company. It has nothing to do with what the worker is owed. Those are two completely different legal processes.
By law, every employer in England and Wales must carry liability insurance. That policy does not dissolve when the company does. The insurer is still there, and still legally obliged to respond to a compensation claim.
A national database called the Employers’ Liability Tracing Office holds records of every compulsory policy ever issued — searchable by employer name, even years after a company has closed.
If you or someone you know was injured working for a company that has since closed, the three-year clock is running from the date of the accident — not from the date the company folded.
On 16 April 2026, Southampton Magistrates’ Court heard the case of a 24-year-old who lost both lower legs after a 15-tonne excavator reversed over him at a waste disposal yard in Hampshire. Under the law in England and Wales, the judge said the appropriate fine would have been £180,000. After a guilty plea — confirmed in the HSE press release — that came down to £120,000.
The company had gone into liquidation. It paid £1.
That figure was picked up by ITV Meridian, the Portsmouth News, and local press across the region within days. The question the coverage did not answer is the one that matters most for the worker himself: does a £1 fine mean he gets nothing?
It does not. Here is why.
The Court Found Them Guilty — So Why Did They Only Pay £1?
The Health and Safety at Work etc. Act 1974 governs the duties every employer owes to the people who work for them. The company pleaded guilty to two breaches of that Act: failing to protect its own workers, and failing to protect others on site from the risks created by its operation. Both charges concern the same failure: no safe system existed to keep pedestrians apart from moving vehicles in the yard.
A fine is a criminal penalty. It is the court’s way of punishing the company. But a company in liquidation is, in effect, a shell. Its assets have been distributed to creditors. There is nothing left to extract. The court is not permitted to impose a fine it knows cannot be paid simply to make a point, so the judge acknowledged the appropriate level of fine and recorded a nominal sum of £1.
The guilty plea stands. The conviction is on record. The HSE investigation found, in specific terms, that the company failed to put in place the arrangements the law required. That finding does not disappear because the fine was £1. It is, in fact, precisely the kind of evidence that supports a civil compensation claim.
Does Getting a £1 Fine Mean He Gets Nothing?
No. The confusion here comes from mixing up two completely different legal processes. The prosecution and the compensation claim run on separate tracks and answer separate questions.
The criminal prosecution establishes fault. The civil claim converts that fault into compensation. They do not overlap, and the outcome of one does not determine the outcome of the other.
What Law Actually Protects Workers When an Employer Goes Bust?
Three pieces of legislation work together here. Each one addresses a different part of the same protection.
THE LEGAL FRAMEWORK
Employers’ Liability (Compulsory Insurance) Act 1969
Every employer in Great Britain must maintain a policy of insurance against liability for bodily injury or disease sustained by employees arising out of and in the course of employment. The minimum cover is £5 million per claim. The policy must have been in force at the time of the accident. This is not optional. Failure to hold it is itself a criminal offence. Carter & Carter handles claims in England and Wales only.
Third Parties (Rights Against Insurers) Act 2010
When an insured company becomes insolvent, the rights of that insured against its insurer transfer directly to the injured worker. The worker can bring the claim directly against the insurer without first pursuing the dissolved company. The insurer cannot use the employer’s liquidation as a reason to avoid paying.
Health and Safety at Work etc. Act 1974
The Act the company in this case pleaded guilty to breaching. In a civil claim, a criminal conviction under this Act is admissible evidence of the employer’s negligence. The worker does not need to re-establish that the employer was at fault. The guilty plea does that work for them. This is why prosecutions — even those ending in a £1 fine — still matter to the injured worker.
A Detail That Often Gets Missed
Most workers have never heard of the Employers’ Liability Tracing Office. It is a database maintained by the insurance industry, and it holds records of every compulsory employer liability policy ever issued in the UK. If you do not know who your employer’s insurer was — and most people do not — the ELTO register can be searched by employer name, company registration number, or even just an address. Policies going back decades are held there. Claims have been successfully brought years, and sometimes decades, after a company dissolved. The database exists precisely because the 1969 Act was meaningless without a way to find the policy.
The Company Has Closed Down — How Does the Compensation Claim Actually Work?
The practical process differs slightly from a claim against a trading employer, but the destination is the same. A specialist solicitor handles the steps below on the worker’s behalf.
Gather what you know about the employer
The company name, address, Companies House number if known, and the date of the accident. You do not need to know who the insurer was. That is the solicitor’s job to find out.
The solicitor searches the ELTO register
Using the employer’s details, the ELTO database is searched for the insurance policy in place on the date of the accident. This is standard practice for dissolved-company claims and takes hours, not weeks.
The claim is brought directly against the insurer
Under the Third Parties (Rights Against Insurers) Act 2010, the injured worker’s rights transfer directly to the insurer. The solicitor notifies the insurer and pursues the claim against them rather than against the dissolved company.
The claim proceeds in the normal way
The insurer appoints representatives to handle the claim on their side. Medical evidence is gathered, liability assessed, negotiations begin. The insurer steps into the role the employer would have played. The HSE guilty plea on record significantly strengthens the liability argument.
Do not wait
The three-year limitation period under the Limitation Act 1980 runs from the date of the accident, not from the date of the prosecution or the company’s liquidation. A claim arising from an accident in November 2023 faces a deadline in November 2026.
My Employer Is Still Trading — Is Any of This Relevant to Me?
All of the above applies equally to claims against trading companies. Every employer with one or more employees must carry compulsory liability insurance. That insurer is who pays the compensation in a successful claim, regardless of whether the company is still operating. The employer does not write a cheque personally. Their insurance does.
The difference with a dissolved company is simply that the ELTO search step replaces the step of writing to the employer directly. The outcome is the same: a claim against an insurer with a legal obligation to respond.
If your employer is still trading and you are hesitating to claim because you are worried about what it means for your job, that is a different question entirely — and one that has its own legal framework. Employers cannot lawfully victimise workers for bringing personal injury claims. But that is a longer conversation, and the starting point is getting advice about your specific situation.
“What most people do not realise is that the £1 fine tells you nothing about what the worker is owed. The criminal prosecution and the civil claim run on completely separate tracks. The prosecution establishes that the employer was at fault. The civil claim is where the compensation actually comes from. And by law, the insurer cannot disappear simply because the employer did.”
David Healey, Senior Solicitor, Carter & Carter Solicitors
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About the Author
David Healey is a Senior Solicitor at Carter & Carter Solicitors in Whaley Bridge, Derbyshire. Qualified in 2005, David has spent over 21 years helping people injured at work and in public places. Accident at work claims are one of the firm’s four specialist practice areas. Carter & Carter is one of very few firms in England and Wales to publish its fee structure upfront and to handle every claim personally at senior solicitor level from start to finish.