ERP supplier sued over cost of Y2K compliance


ERP supplier sued over cost of Y2K compliance

Bill Goodwin

Bill Goodwin

A well known electronics component company has started legal action against an IT supplier for allegedly charging too much for fixing the year 2000 problem.

The action could be the first of a spate of cases, following claims that experts exaggerated the impact of the millennium bug.

The company, which has declined to be named, agreed to install an ERP system on the advice of an IT supplier, to make stock control systems Y2K complaint.

Once the work began, the supplier doubled its fee from £200,000 to £400,000 and said that it would not be able to meet the agreed deadline.

The electronic components company, based in the South East, came up with its own solution weeks before the millennium, which allowed it to upgrade its existing systems at a fraction of the cost.

The electronics company has instructed City law firm Masons to take legal action against the ERP supplier for misrepresentation.

"It was a classic case of the sales team selling a simple solution to an agreed deadline and the project teams coming in and saying the project was much more complex and much larger," said Masons partner Clive Seddon, who is advising the firm.

Although lawyers believe that other legal actions against IT suppliers will follow, they have warned that it will be difficult for users to claim compensation if they believe suppliers have exaggerated the impact of Y2K.

Users are unlikely to have a case if they have upgraded to new systems which offer other advantages than simply being Y2K compliant, said Seddon.

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