Simple mistake in companies register could cost government millions

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It was a simple slip of the pen (or keyboard). But it's one that could end up costing the UK government almost £9 million, after its incorrect spelling of one company's name led to another firm going into administration.

In 2009, staff at Companies House wrongly noted that engineering firm Taylor & Sons Ltd had been wound up, when it was actually an unrelated company – Taylor & Son Ltd – that had gone bust, according to The Telegraph.

The mistake led to the collapse of the firm and a High Court judgement this week that could see the UK government liable for nearly £9m in damages.

The company's misfortunes began, according to The Telegraph, when its suppliers learnt that the firm was in liquidation, following the inaccurate entry on the companies register.

Despite efforts to communicate the mistake to customers and suppliers, the damage had already been done. Taylor & Sons lost key customer contracts and fell into administration just two months later.

Philip Davison-Sebry, the firm's former managing director, explained how such a small mistake had a devastating effect on the business. "We lost all our credibility as all our suppliers thought we were in liquidation. It was like a snowball effect," he was reported as saying.

Although the error was a one-off for Companies House, the judge noted that such an error was "easy to avoid."

The tale echoes the 'million dollar comma' court case in Canada, in which a legal dispute over the placing of a comma in a business contract led to telephone company Bell Aliant's being able to end the contract early.

The result? An estimated loss of one million Canadian dollars for the other company involved, cable TV provider Rogers Communications.

While for most of us, a typo is unlikely to have such dramatic consequences, these cases serve to highlight how, for any business, you can never be too careful with the details.

Have you ever made an error at work that had disastrous consequences for your business? Or do you know of any other high-profile spelling mistakes? Let us know in the comments below.

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