I hope I have put this under the right category, if not please let me know where to direct the question.

I am not a law student, the case I have here is a live and current one, and I would greatly appreciate if anyone can point me in the direction of any precedents or laws that relate to my case. I'll keep this as simple as I can.

My company contracted another company to provide a service. The Contract signed stated that the service provided would include data backup. Data was lost. And it became apparent that the data backup service was never provided. Some of this data were VAT receipts for transactions in the last 3 years.

The consequence of loosing this data is if HMRC audit my organisation and find that I am with out these receipts, they can demand back any VAT claimed and in addition I must also pay company tax on the sum of the receipts as they can no longer be considered legitimate company expenses.

The contract does not state any limitation of liability for the supplier, and although they have not admitted liability for failing to backup they have made a "with out prejudice" settlement offer which almost covers the cost of the service.

Along with the cost of the service, my claim also contains the total costs I might incur IF the government audit the company and decide to charge me. There is no guarantee that they will do either. However as a direct result of the suppliers failure to provide a service they were contracted to do I am at risk, and if I do incur these charges there is no guarantee that this company will be about for me to pursue compensation in the future.

Does anyone know of any laws or precedents that would support, and or even oppose my case.

Thank you in advance.