Sky v EDS - 7 months in and nowhere near finished

Sky’s legal case against EDS – which has already lasted seven months – is expected to continue for at least another two months, and a judgement is unlikely much before Christmas (assuming there isn’t a settlement).

The case is providing solid business for the legal firms involved. Computer Weekly reported in October last year that the combined legal costs of the case were expected to be about £45m, almost as much as the original £48m price of the CRM [customer relationship management] project being argued about in the High Court in Holborn. But the costs are now likely to exceed £45m. Sky alone has reported exceptional charges in 2007 and 2008 of about £30m for its costs related to the case.

The case is unlikely to be affected by HP’s acquisition of EDS. The deal has to be approved by US regulators which could take about three months.

At times in the High Court last year there were more than 20 people occupying the legal benches. There are more than 700 box files of material, such as expert reports, contracts, EDS internal standards and witness statements.

BSkyB filed a claim against EDS in August 2004, but it took more than two years for the case to reach the High Court. It began in October 2007 with BSkyB outlining its claim against EDS for £709m, part of which was compensation for alleged lost benefits.

“This is a case about deceit,” said QC Mark Howard who opened opening the case for BSkyB. “Sky allege that, during the course of a competitive tender, EDS represented they had the resources, proven technology, and methodology to enable them to deliver the solution within a certain timescale and cost.

“The representations are alleged to have been made dishonestly in order to win the business.”

In EDS’s opening defence, QC Mark Barnes said, “We suggest it is an artificial claim designed to overcome the difficulties that Sky face under their contracts and to allow them to claim absurd and extravagant amounts of damages.” He said the “main problem with this project was that it was wholly unspecified”.

He said Sky “knew it wanted a super-dooper CRM system but had little more idea of what it wanted or needed.” EDS strongly denies deceit, dishonesty, or misrepresentation.


BSkyB and EDS face £45m legal bill over CRM system

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