Companies House blunder destroyed family business

In an unprecedented case, a simple spelling error by Companies House – in which a single letter ‘s’ was mistakenly left out of an official document – caused the collapse of a 124-year-old family engineering business, the High Court has ruled.

Cardiff-based business, Taylor & Sons Limited, had been mistakenly recorded as having been wound up. In fact, it was an entirely unconnected company, Taylor & Son Limited, which had gone under. When the mistaken record became public, Taylor & Sons’ business ran dry, orders were cancelled and credit facilities were withdrawn. The company ultimately had to enter administration.

Handing victory to the company’s former managing director and co-owner, Philip Davison-Sebry, the Court ruled Companies House legally responsible for the debacle. The error was the only one of its kind ever recorded at Companies House and the Court observed: 'That can only be because it was easy to avoid'.

Taylor & Sons had had absolutely 'no way of protecting itself' against the error and its catastrophic consequences. The damage to the company was the foreseeable result of the careless mistake and the Court found that it was 'fair, just and reasonable' to hold Companies House liable for what happened.

The company, which employed more than 250 people, had traded successfully for generations and, although it had not had an easy time during the recession, the error was the 'precipitating factor' in its demise, the Court ruled. The amount of damages payable by Companies House had yet to be finally assessed, but Mr Davison-Sebry's lawyers had valued his claim at £8.8 million.

Contact: Alan Porter