Companies House and their expensive typo
The High Court has held that Companies House was liable when it mistakenly recorded that a company which had been trading for 124 years had been wound up.
Companies House had confused the company ‘Taylor & Sons Limited’ with a different company ‘Taylor & Son Limited’. Although the names were very similar, these companies should have been easy to distinguish given that all companies have their own unique company numbers. Companies House corrected the error shortly after it was discovered, but by then it was too late – a number of people had already seen that the company was in liquidation. Due to the loss of confidence in the company by creditors and other parties, the company went into administration.
The High Court held that the Registrar of Companies (Registrar) owed a common law duty to a company against which it registers a winding-up order to take reasonable skill and care to register the order against the correct company. The duty does not include a duty to verify information supplied to the Registrar by third parties, such as insolvency practitioners, only to ensure the information is accurately recorded. Damages have not yet been awarded but it has been reported that the claim is valued at circa £8.8million.
The case is interesting as it shows that the Registrar has a duty of care and is therefore susceptible to a damages claim if it wrongly registers winding-up orders. However the judge made it clear that his finding was specific to the situation where the Registrar records a winding-up order against the wrong company and that nothing in this case should indicate how other cases brought in relation to other types of entry on the register should be decided.
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