How One Typo Killed A 124-Year-Old Business And Cost The UK Government £9 Million
A single spelling error has caused a 124-year-old Welsh family business to collapse – and cost the government GBP9 million (RM49,527,235.26) in legal bills.
By Sadho Ram — 29 Jan 2015, 01:54 PM — Updated almost 10 years ago
In case you're having a bad day, spare a thought for the owners and 250 staffs of Taylor & Sons Ltd, a 124-year-old firm, which has been forced out of business due to a single spelling error
Yes, you read it right. A one-letter typo by Companies House, a government agency that acts as the registrar for all companies in the UK, has irreparably damaged the family business!
We're guilty of the occasional typo too, but we sure hope it doesn't ever cost us as much!
So what really happened? In 2009, Companies House recorded information stating that 'Taylor & Sons Ltd' had been wound up.
Following which, the business of 'Taylor & Sons Ltd' evaporated: its orders were cancelled, contracts were lost and credit from suppliers was withdrawn. The 124-year-old company subsequently went into administration, and was finally dissolved in 2014.
So Companies House was right? Nope! How?
The problem was that Companies House had mistakenly stated that 'Taylor & Sons Ltd' had gone into liquidation. In fact, they had meant to say 'Taylor & Son Ltd', a completely different company, one that actually had closed down.
The Independent reported Companies House had inserted a rogue 's' and the actual company that had gone into liquidation 6 years ago was based 200 miles away in Manchester.
While Companies House corrected their typo, which they termed "extraordinary", just 3 days later, by then the damage was done: the information had spread uncontrollably across the Internet
The outcome, said the claimants, was that when Taylor and Sons' customers and suppliers checked its records, they were put off doing business with it. In fact, Philip Davison-Sebry, the company's former managing director, said that despite its attempts to reassure them, within three weeks all 3,000 of its suppliers had terminated their orders, while credit facilities were withdrawn.
And while the typo was fixed within three days, "word had got around" and customers - including Tata Steel, with whom it had a £400,000-a-month deal - cancelled their contracts.
Davison-Sebry added that one client had called him while he was on holiday. "They said they weren't happy at all I was on holiday, asking how could I be on holiday at a time like this?"
cityam.com
Taylor & Sons Ltd then sued Companies House and won
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.
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.
While damages have yet to be awarded, lawyers acting for Taylor & Sons Ltd owner Philip Davison-Sebry have valued the company's claim at GBP9 million (that's over RM49.5 million)
Mr Davison-Sebry, 57, has claimed nearly £9 million in damages and a written ruling was published yesterday. The judge made no decisions on levels of compensation in the ruling however a damages assessment is expected at a later stage.