The £8.8m Mistake: How A Spelling Error Destroyed A Business

Posted on Feb 5 2015 - 6:20am by Expert-Zine

    Companies House, a government agency that acts as the registrar for all companies in the UK, is about to pay £8.8m to a company it accidentally destroyed several years ago. A High Court judge ruled this week that the agency was responsible for the collapse and dissolution of an engineering firm in Welsh.

    A simple spelling error has caused serious damage to Taylor & Sons Ltd, a 124-year-old engineering firm in Welsh. Companies House will now pay a huge amount of money to cover the damages. The firm’s lawyers have valued the claim at £8.8m.

    How Did It Happen?

    UKIn 2009, Companies House recorded information stating that Taylor & Sons Ltd had been wound up. It may sound like there’s no problem with it, but the agency actually meant Taylor & Son Ltd, which is an entirely different company (take note of the difference in spelling). That single letter has caused serious damage to Taylor & Sons Ltd’s credibility.

    Managing Director Davison-Sebry recalled how quick the turn of events was during those tough times.

    “I was on holiday in the Maldives when I got a message to urgently contact Corus, one of our major clients. They said they weren’t happy at all I was on holiday, asking how could I be on holiday at a time like this?” he said.

    After the incident, the engineering firm suddenly evaporated. Clients cancelled their orders, suppliers withdrawn their credit facilities, and the firm lost multiple contracts. Within a few months, the company that employed 250 people had gone into administration, and was dissolved in 2014.

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    An Honest Mistake

    Taylor & Sons Ltd is different from Taylor & Son Ltd. Companies House mistakenly recorded that Taylor & Sons Ltd had gone into liquidation. The agency had meant to say Taylor & Son Ltd. It took only a single letter (“s”) to ruin a well-established business. Companies House had corrected the error three days later, but it was too late. The information had cascaded quickly across the Internet and the damage the mistake caused had gone so serious.

    What Taylor & Sons Ltd

    As expected, Taylor & Sons Ltd sued Companies House and after a four-year legal battle, they won. The judge ruled that the agency is liable for the damages the engineering firm has sustained. Davison-Sebry said he was “absolutely delighted” by the ruling.

    “Although it was a long and painful experience and very expensive, the truth came out and the judge understood fully what they [Companies House] did,” he added.

    Companies House has not yet provided any comment.

    “Companies House has recently received the judgement in this case and is currently considering the implications at this time. Until these considerations are complete we remain unable to comment further,” a spokesperson said in a statement.