A rare (and in my view entirely justified) case of negligence liability for pure economic loss caused by bungling bureaucrats, courtesy of Edis J in the English High Court today.

X Ltd is in difficulties, trying (with some prospects) to turn the corner. The kybosh is put on all its efforts when, suddenly, no supplier will give it any credit and its bank will lend it nothing. Why? A bureaucrat in Companies House, having received a sloppily-prepared notice of liquidation proceedings against a company with a similar (but not identical) name, has broken CH's own internal procedures and misguidedly registered X Ltd as in liquidation. As a result (allegedly) X indeed goes bust. The guiding spirit of X, assignee of X's liquidator, sues CH for negligence.  CH understandably raise a duty of care point.

Edis J decides in favour of a duty at common law (having doubted an alternative plea of BSD). No problems of over-extended liability: any duty is owed to the company alone. And companies are forcibly subjected to the vagaries of CH, not having any alternative remedy against third parties. Good tight reasoning.

See Sebry v Companies House & Anor [2015] EWHC 115 (QB).


Andrew