BSkyB ruling rings alarm bells for IT suppliers. Andrew Dodd & Louisa Albertini explain why
In a landmark court ruling on 26 January 2010, a judge has ruled in favour of BSkyB in its bitterly contested £710m legal battle with EDS. Mr Justice Ramsey found that EDS had fraudulently misrepresented to BSkyB the timescales in which it could deliver a new customer relationship management (CRM) system for BSkyB.
The judgment will cause reverberations in the IT industry. In establishing fraudulent misrepresentation, BSkyB blew a hole through the £30m liability cap in its contract with EDS. Its precise damages figure will be assessed by the court in a separate hearing. Preliminary indications, however, are that it will comfortably exceed £200m.
Problems from the start
EDS successfully tendered in 2000 for the design and implementation of a new CRM system for BSkyB. The £46m project was quickly beset by difficulties. After successive renegotiations in 2001 and 2002, there was an acrimonious parting of ways in 2002. BSkyB paused for breath and consulted its lawyers.
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