[cabfpub] UK's Companies House Liable for Misinformation

[Ben Wilson]

FYI – FWIW from Tom Smedinghoff 

 

From: Federated ID Management Task Force
[mailto:BL-FIDM at MAIL.AMERICANBAR.ORG] On Behalf Of Smedinghoff, Tom
Sent: Monday, February 16, 2015 8:49 AM
To: BL-FIDM at MAIL.AMERICANBAR.ORG
Subject: [ABA-IDM-TASK-FORCE] Liability of IdP?

 

With respect to the issue of identity system participant liability, and the
discussion regarding legislative approaches to the issue, a list participant
alerted me to a recent UK decision that might be of interest.  See Companies
House liable for company's collapse
<http://economia.icaew.com/news/january-2015/companies-house-liable-for-comp
anys-collapse>  and Government in £9 million payout after single letter
blunder causes business to collapse
<http://www.telegraph.co.uk/news/uknews/law-and-order/11372343/Government-in
-9-million-payout-after-single-letter-blunder-causes-business-to-collapse.ht
ml> .

 

In that case, Companies House (the UK government's official registrar of
companies, and an executive agency of the UK Department of Business,
Innovation and Skills) had provided (apparently negligently) false
information to credit reference agencies indicating that a business was in
liquidation. The result was that all of its suppliers canceled their orders
within three weeks, and the 100-year old company was forced to shut down.
The UK High Court held Companies House liable for the resulting damages,
finding that it owed a duty of care to the business, and that there was a
special relationship with the business because “it is foreseeable that if a
company is wrongly said on the register to be in liquidation, it will suffer
serious harm.”

 

Since the case involves identity attribute-like information, it appears to
raise numerous issues of relevance for the current discussion, including the
liability of identity providers and attribute providers, the nature of the
duty they might owe to persons and businesses they identify, and the
potential liability of a government agency. It will be interesting to see
whether similar reasoning is applied to identity credentials asserting
incorrect information.

 

Tom

 

 

Thomas J. Smedinghoff
Locke Lord LLP
225 W. Wacker Drive, Suite 3000
Chicago, Illinois 60606
312-201-2021 Direct
312-545-1333 Mobile
 <mailto:Tom.Smedinghoff at lockelord.com> Tom.Smedinghoff at lockelord.com
 <http://www.lockelord.com/> www.lockelord.com

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