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BSkyB to win £200 million damages from EDS

by Scott Bicheno on 27 January 2010, 09:44

Tags: Hewlett Packard (NYSE:HPQ)

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The start of something?

Back in the summer of 2000, UK broadcaster BSkyB chose IT services giant EDS to run a new CRM project, designed to create an advanced customer service system for its Scottish call centres. Less than two years later, Sky called the whole thing off after EDS failed to deliver.

Sky took over the CRM project and eventually completed it in 2006. Displeased at having to do everything itself, Sky commenced legal proceedings against EDS in 2004. The case went to court in 2007 and concluded in July 2008, around the time HP was completing its acquisition of EDS.

Why it took him a year and a half to deliver his judgement is not clear, but yesterday Mr Justice Ramsey found that EDS had lied to Sky in order to secure the contract. The final figures for costs and damages are yet to be determined, by Sky reckons they should be in the region of £200 million.

This sets an interesting precedent as it's not unknown for companies bidding for IT infrastructure projects - especially in the public sector - to over-promise and under-deliver. The difference between the private and the public sectors seems to be that the state generally capitulates when faced with a situation like this and hands out more of our money. Maybe this will change things.

 

UPDATE - 10:30, 27 January, 2010 - HP just sent us the following statement:

"This is a legacy issue, dating back to the EDS business in 2000, which HP inherited when it acquired EDS in 2008. We are pleased the Court dismissed the majority of the allegations made. While we accept that the contract was problematic, HP strongly maintains EDS did nothing to deceive BSkyB. HP will be seeking permission to appeal.

"As the world's largest technology company, HP has built a solid reputation based on strong governance and adherence to the highest ethical standards." 

 



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Why it took him a year and a half to deliver his judgement is not clear…

It's because there are no defined time pressures on Judges at all. Everyone else in the legal system (Claimant's, Defendants, lawyers on their behalf, etc…) has very defined time limits to do everything. Where there aren't explicit time limits already, judges can impose them during a case. There is no mechanism to impose time limits on the judges themselves.