BSkyB has agreed to accept a total settlement figure of £318 million with IT suppliers EDS (now owned by HP) following the conclusion of one of the most expensive IT disputes to date.
BSkyB sued EDS back in 2002 in relation to a £48m IT contract to produce a customer relationship management system. The contract contained a clause limiting EDS' liability to £30m.
In February the High Court concluded that EDS had made a series of fraudulent misrepresentations to BSkyB about the ability to complete the project on time and on budget meaning the ceiling on liability fell away. As a result, the Court ordered EDS to make an initial payment to BSkyB of £270m and the parties subsequently agreed a total settlement of £318m.
Sarah Birkbeck comments: "Overstating the case to clinch the deal cost HP dear in this case. Having lost on liability for fraudulent misrepresentation and with an initial bill to pay to BSkyB more than 5 times the original cost of the project, it is perhaps unsurprising that there was no appetite on the part of HP to go through further hearings about the final level of damages."
Having said this, given the amount of time and money already spent on the case, an out of court settlement makes sense for both parties. HP will want to move on from a problem that was not of its making and, by settling, BSkyB at least has certainty on the issue of compensation, without the need to wait for a further court hearing to settle damages or the prospect of an appeal.
BSkyB sued EDS back in 2002 in relation to a £48m IT contract to produce a customer relationship management system. The contract contained a clause limiting EDS' liability to £30m.
In February the High Court concluded that EDS had made a series of fraudulent misrepresentations to BSkyB about the ability to complete the project on time and on budget meaning the ceiling on liability fell away. As a result, the Court ordered EDS to make an initial payment to BSkyB of £270m and the parties subsequently agreed a total settlement of £318m.
Sarah Birkbeck comments: "Overstating the case to clinch the deal cost HP dear in this case. Having lost on liability for fraudulent misrepresentation and with an initial bill to pay to BSkyB more than 5 times the original cost of the project, it is perhaps unsurprising that there was no appetite on the part of HP to go through further hearings about the final level of damages."
Having said this, given the amount of time and money already spent on the case, an out of court settlement makes sense for both parties. HP will want to move on from a problem that was not of its making and, by settling, BSkyB at least has certainty on the issue of compensation, without the need to wait for a further court hearing to settle damages or the prospect of an appeal.
No comments:
Post a Comment
Thanks for your comment. We look forward to hearing from you again soon.