BSkyB would have hired PwC if EDS employee had not made misrepresentations

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BSkyB would have hired PwC if EDS employee had not made misrepresentations

Tony Collins

BSkyB would have hired PricewaterhouseCoopers if EDS had not made misrepresentations over its ability to deliver a major CRM project, a court has found.

The finding is part of a 468-page judgment, which was e-mailed to interested parties last night, following a £709m court battle between BSkyB and EDS.

In his judgment, Sir Vivian Ramsey said there had been "deceit" by EDS. An employee had dishonestly made representations "knowing them not to be true".

The employee made the representations both before BSkyB selected EDS and before it signed the prime contract, the judge found.

"Sky did rely on those misrepresentations and was induced to select EDS, enter into the letter of intent and the prime contract. EDS is accordingly liable to Sky in deceit for fraudulent misrepresentation," said the judge.

If the true position had been known to Sky it "would have moved to favour PwC much more strongly", he said.

EDS owner HP is seeking permission to appeal. Its lawyers believe that a finding that there had been misrepresentation by one of EDS's witnesses is not evidence of a culture of deceit within the company. There had been 27 EDS witnesses during the 10 months of hearings.

EDS had argued that its liability under the contract was capped at £30m. But the court found in favour of BSkyB's claim that misrepresentation by EDS removed the cap on EDS's liability, leaving EDS with potentially much higher damages to pay.

The judge will hear arguments by both sides on the size of damages in February.

Herbert Smith, BSkyB's lawyers, said EDS would be liable to pay at £200m in damages. But EDS said the judge dismissed the majority of allegations made by BSkyB.

"While we accept that the contract was problematic, HP strongly maintains EDS did nothing to deceive BSkyB," said EDS.

Update: Court rules in favour of BSkyB in £700m dispute >>


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