Companies House mistake 'caused firm's collapse'

Philip Davison-Sebry said he had lost business after people thought his company had been wound up

A High Court judge has ruled that a mistake by Companies House caused a 124-year-old south Wales company to go into administration.

The case was brought by the owner of Taylor & Sons which was wrongly recorded by Companies House as being wound up in 2009.

It was a company with a similar name, Taylor & Son, which was actually in difficulties.

Companies House said it was considering the implications of the judgement.

Taylor & Sons' owner Philip Davison-Sebry told the court Companies House had caused the collapse of his business, as customers walked away because they thought it was being wound up.

He is suing the agency for £8.8m.

In his judgement, Mr Justice Edis found Companies House owed a duty of care when entering a winding up order to take reasonable care to ensure that the order is not registered against the wrong company.

Mr Justice Edis ruled Taylor & Sons had proved that the reason it went into liquidation was because of an error made by Companies House.

He also said the company was not consulted to enable it to challenge the mistake.

"My finding on the causation issue shows that in this case that harm amounted to the destruction of a company which had traded for over 100 years and which owned a valuable business," he said.

However, this is only a preliminary judgement and the issue of damages still has to be resolved.

Information corrected

The High Court had been told last November that it was claimed that the mistake led to the firm - which employed 250 people - going into administration.

Companies House contested the claim.

At last year's hearing Clive Freedman QC told Mr Justice Edis that Companies House was in breach of its duty to Taylor & Sons Ltd when it made the mistake.

The information was wrongly recorded on the companies register on 20 February and was corrected three days later on 23 February.

Acting for the former co-owner, Philip Davison-Sebry, the barrister said that by the third day it was already too late, as it had already got around that the company was in trouble and the record remained elsewhere.

Companies House contested the claim on the basis that it did not owe a duty of care to the company.

It said that the publication was for such a short period of time that it could not have been the cause of the business failing.

Following the judgement, a Companies House spokesperson said it was considering its implications and could not comment further.