Companies House reassures freelancers after £9million mistake

Companies House has reassured freelancers and other suppliers who use it that its checks and balances have been updated since an error it made was ruled to have sent a thriving business into administration.

Speaking to FreelanceUK, a Companies House official suggested that the systems used in 2009 when it wrongly and publicly recorded the firm - Taylor & Sons Ltd - as being wound up were less sophisticated than those it uses today.

“Since the incident” the official said, “we have made improvements to our processes and procedures and, in light of the judgement, we will continue to review all aspects our business.”

The judgement cited is by the High Court. It found Companies House liable for Taylor & Sons’ failure because it named the firm on a winding up order, when in fact it should have named Taylor & Son, an unrelated firm.

Companies House argued in court that the incorrect name was shown on the companies register for only a short time (three days), and said that something else must have led to Taylor & Sons’ collapse.

It also argued that it did not owe a ‘duty of care’ to the firm which, according to its £8.8million suit for false publication, was not informed of the winding up order, so it was unable to protest against its accuracy.

The judge was unconvinced with Companies House’s claims. He ruled that it did owe a duty of care to Taylor & Sons, a “valuable business” set up in 1875, and disagreed that three days was too short a time.

Mr Justice Edis heard that such a period saw big clients pull their orders with Taylor & Sons because, he said, the false rumours about it winding up had an “authoritative starting point” – Companies House.

The judge also took the step of naming the employee at the government agency who was behind the erroneous entry, but when asked by FreelanceUK if the civil servant has had to forfeit his job, it declined to say.

“Wedo notcomment oninternal staff matters,” the Companies House spokesman said. “[We are] not in a position to say more at this time because of the legal considerations that still do apply.”

His comments refer to the High Court ruling being only a preliminary judgement, meaning that the issue of the £8.8m damages sought by the owners of the now-defunct Taylor & Sons (on behalf of itself and the 250 people who lost their jobs), is yet to be resolved.

 

4th February 2015

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